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Business Litigation Alert: "Employers Beware - Understanding the Issues of Unpaid Interns"

It’s May, which means the summer internship season is upon us.

Internships are more popular than ever, with the National Association of Colleges and Employers reporting an estimated 8.5% increase in intern hiring for 2013. Your company is likely receiving an influx of resumes from college students, recent graduates, and (even) those looking for a career change offering their services – unpaid – to gain experience and build up their resume.

This may all sound too good to be true. It can be.

Although unpaid internships look like a “win-win,” the U.S. Department of Labor is cracking down, fearing that many violate wage and hour laws.

Here are some tips to help keep the Department of Labor at bay:

  • Avoid having unpaid interns perform administrative tasks which could be argued not to offer any educational benefit from the work experience.
  • Offer unpaid interns valuable skills, training, and experience that benefit them, not just the company.
  • Set specific dates for the internship program so that the job does not appear to be a trial period for employment.
  • Have interns sign an agreement that acknowledges that the internship is unpaid, the specific dates of the internship, and verbiage on the internship’s educational benefit.

Implementing these concepts can help your company avoid legal troubles like minimum wage and overtime issues, liability for misclassification, employee benefits and workers’ compensation, among others.

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