Internships: benefit to both company and intern, if done correctly.

• Author: Saade, Renea
• Position: Legal Speak

Whether it is called an internship, externship, cooperative learning experience, clerkship, apprenticeship or rotation, a hands-on training position can be a tremendously rewarding and beneficial endeavor for both the trainee and the organization providing the training. Indeed, many schools and educational programs require some form of hands-on work experience as part of their curriculum. And many students select a school or program based on whether it offers hands-on experiences and the scope and quality of such experiences. Training programs have also been a way for folks to re-enter the workforce in a new field after having lost their previous job as part of the economic downturn. There is no question that these programs are an integral part of our society's educational system and workforce. But these programs cannot succeed without the willing and active participation of companies and other organizations that serve as host "employers." Companies generally embrace the idea of low or unpaid labor (which most internships equate to). Many organizations, particularly in the nonprofit and public sectors, rely upon it.

Avoiding Risk

However, legal risks can arise from these sorts of training arrangements. With appropriate planning and the correct administration, these risks can be easily managed, if not avoided altogether. This planning and effort can also greatly increase the benefit that both participants receive from the arrangement, making it an even more rewarding experience.

The most significant risk is that a company can be found to owe an intern wages. Unless an internship is deemed exempt from federal and state wage and hour laws, an intern must be paid at least minimum wage for all hours worked and any applicable overtime. To be exempt from federal (and most state) laws, internships within the for-profit sector must meet these six criteria: (1) the training, although it includes the actual operation of the company, is similar to what a vocational school would give; (2) the training is for the interns' benefit; (3) the interns do not displace regular employees, but work under the close observation/supervision of them; (4) the company derives no immediate advantage from the interns' activities, and the training may, at times, interfere with operations; (5) interns are not entitled to jobs at the end of their...