Intern Pay Guidelines

As many companies prepare to welcome summer interns, it is important to ensure you are meeting all laws associated with hiring them. The Dept. of Labor provides pay guidance according to the Fair Labor Standards Act (FLSA). Based on this Act, it is important for employers to consider the following:

• Interns are generally required to earn at least minimum wage. College credits are not an acceptable form of compensation and cannot be offered in lieu of compensation.

• There are some exceptions that may allow for an unpaid internship. In order to hire an unpaid intern the following six criteria must be met:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

2. The internship experience is for the benefit of the intern;

3. The intern does not displace regular employees, but works under close supervision of existing staff;

4. The Company derives no immediate advantage from the activities of the intern and, on occasion, its operations may actually be impeded;

5. The employer and the intern understand that the intern is not necessarily entitled to a job at the conclusion of the internship; and

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all of the factors listed above are met, an employment relationship does not exist under the FLSA, and the Act’s minimum wage and overtime provisions do not apply to the intern. If the internship does not meet all of the above criteria, then it should be a paid internship and all federal and state wage and hour laws apply.

Before hiring, employers should review their internship plans and ensure proper compensation for interns in compliance with the FLSA and state wage and hours laws.