Business Tips: The Unpaid Internship: Is Your Business Ready for It?

Business Tip: The Unpaid Internship: Is Your Business Ready for It?

Spring is just about upon us and that means that college kids will be let for a well-deserved. It also means that many of these young people will be looking for internships to train them and give them necessary skills as well as experience in the business world.
The Federal government has responded positively to the notion of unpaid internships by allowing more flexibility for companies who wish to benefit from unpaid interns which in turn allows those 'hired' for the position the opportunity to expand their potential for a well-salaried job in the future.

The Fair Labor Standards Act discussion the conditions that a business can allow interns to work without pay. It involves the terms and stipulations listed below.

Conditions in Accepting an Unpaid Intern

1. The unpaid intern must benefit from a training program that is similar to that of a schooling circumstance.

2. The intern partnership is more advantageous to the intern than to the business he or she will be working for.

3. The hiring business owner will not get immediate value form the partnership situation.

4. Both the business owner or manager and the intern understand that payment is not a mandatory issue.

5. The job that the intern is given will not result in another staff member's dismissal.

6. There is a clear message from the business owner to the intern that a salaried job is not guaranteed after the internship has been completed.

If the business owner fails to adhere fully to any of these terms, the intern cannot work without pay: he or she must earn minimum wage with standard tax with-holdings taken off the paycheck.

Notwithstanding the above prerequisite conditions, business owners should take into account the exposure faced when employing an unpaid intern.

This may include potential lawsuits or workers comp issues.

As such, business owners should answer the following important pertinent questions:

• Will the business's Workers Compensation or Commercial General Liability insurance pay for related expenses of an unpaid intern's injury incurred at the workplace?

• Does the intern's college have sufficient liability coverage to cover potential damages or losses made by the intern?

• Does the business Employment Practices Liability coverage protect the company in the event the intern will sue for any reason?

• Does the intern clearly understand his or her work requirements?

• Is there a document signed by the intern about job duty, no pay, hours required at the job and calendar work dates?

Be sure to contact an experienced independent insurance agency about any other issues in the business / unpaid internship relationship.



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