Call or Text: (504) 934-2020

Business Law Blog

Grow Your Business By Hiring An Intern

Posted by Amanda Butler Schley | Feb 03, 2021 | 0 Comments

via goabroad.com

Grow Your Business by Hiring an Intern

            Ready to move forward with hiring extra help but concerned with strapping yourself with another paid employee? Hiring an intern may be the perfect option but it comes with a series of legal issues. Managing people is one of the hardest parts of owning your own business. But having the right team in place is the key to success. One way to build your perfect team is to start with interns.

            The easiest way to recruit and hire interns is through educational institutions. The interns are given course credit in lieu of compensation. While this may come with extra paperwork, it is helpful in clearly defining their unpaid internship status and easily avoids any legal pitfalls.

            The majority of states use the “economic realities” test to determine whether an intern is an employee that should be paid in the for-profit private business sector. Even if the intern is going to be participating in operations of the company, they cannot be left to their own devices. An intern must be given a certain level of training that would be provided in an educational environment. This would include things like allowing them to complete a task and then providing an evaluation with notes, including things that could have been done differently and why. The internship must also be beneficial to the intern and must not be solely for the benefit of the business. The intern must be supervised in all tasks and not left to their own devices. Additionally, the supervisor training the intern must not directly derive an immediate benefit from the intern. This means taking the time to teach them, which may slow down operations temporarily but helps the business overall. The intern must not be entitled to a job at the conclusion of the internship, and they must not receive compensation for their internship, instead earning course credit. In this scenario, the intern is not an employee entitled to minimum wage compensation and you are not in violation of wage laws by giving an unpaid internship.

            A minority of states use the “primary beneficiary test” to determine if an intern is an employee. This test involves no promise of compensation, training similar to that provided in an educational environment, the internship is tied to education by incorporating paperwork or assignments or providing course credit, the internship is intertwined with the academic calendar, the internship is limited to a certain time period, the internship compliments rather than displaces existing employees, and the internship is not conducted with the expectation of a job at the conclusion of the internship.

            Tasks an intern can complete include things like managing social media while the employer provides training and advice on marketing techniques. It may also include clerical tasks with training and guidance provided on the business's software and filing system and why they are used.

            When hiring an intern, it is important that you provide the expectations to the applicant that the intern will be unpaid, the types of tasks that will be completed, they will not be entitled to a job upon internship completion, and how they can earn course credit. It is also wise to ask what a potential intern is looking for in their internship and if that is something you can provide.

            Upon hiring an intern, it is important that they sign certain paperwork to protect the business. This includes first and foremost a general contract that details they are not to be considered an employee at all and defining their responsibilities as an unpaid intern. Your agreement should also include a confidentiality and non-disclosure provision.

            For tax purposes, an intern does not have to fill out an IRS I-9 Form. However, interns can be reimbursed for expenses and given a small pay of no more than 20% of what you would pay to a regular employee without losing their status as an unpaid intern.

            Hiring an unpaid intern through your local university is a great way to get help with your business, provide thorough training to potential employees, and build your business's team for future success. If you have any questions about hiring an unpaid intern or paperwork to protect your interests in this process, contact the Business Law Group for a consultation.

About the Author

Amanda Butler Schley

Ranked as a Top Rated Business and Commercial Attorney, I have more than a decade of experience representing boutique hotels, family-owned businesses, privately owned restaurants, breweries, artists, executives and entrepreneurs.

Comments

There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Menu