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How to Run a Productive Internship Program and Stay Out of Legal Trouble

November 15, 2013
URL: http://www.entrepreneur.com/article/229920

A student internship program can greatly benefit a company’s productivity, but if not run properly, it can jeopardize the wellbeing of the entire business. Just look at publishing powerhouse Condé Nast, which recently dissolved its internship program following a highly publicized lawsuit from two former interns.

For companies seeking to set up an internship program, it's important to play by the rules. The Department of Labor requires six pieces of criteria be met for an internship to be considered legal – a task that’s easier said than done. “While some of the requirements are a simple matter of checking the box and can be fulfilled through a well-drafted internship agreement, the majority are subjective,” says Peter Minton, founder and president of Minton Law Group in New York City.

Related: The Case for Paying Interns (Infographic)

To help clarify, here’s some expert advice on running a productive – and legal – internship program at your startup:

1. Offer what can’t be learned in class. “Internships should serve as educational experiences that train young adults for their careers,” says Heather Huhman, founder of Come Recommended, a content marketing and digital PR consultancy for organizations with products that target job seekers and employers. Be sure the internship includes mentorship opportunities and training that builds real skills.

2. Pay them or don't, but don't give them meaningless work. Money can’t buy the happiness of an intern who's stuck with wasteful busywork for months at a time. “Just because you pay your interns doesn’t mean you should only provide them with basic administrative duties and nonessential activities, like making copies or fetching coffee,” says Nathan Parcells, co-founder and CMO of InternMatch, an online platform that helps students find internships and companies hire talented students.

3. Don’t try to trim the payroll. When brainstorming intern tasks, don’t simply assign what needs to get done around the office – especially if those tasks are usually carried out by a full-time employee or expert contractor, says Huhman. Sure, your website may need a redesign, but rather than exploiting the intern’s low cost of labor, hire a professional instead to avoid the legal headache.

Related: What My Corporate Internship Taught Me About Entrepreneurship

4. Invest in valuable hires. Not only can stellar interns support your current operations, but they can help push your company forward as hired employees in the future. “Providing anything less than the best educational experience for your interns doesn’t just damage your future hiring potential, but also that of other companies within your industry,” says Parcells. Look ahead toward whether you can add full-time employees to your team in the next year, and scout for interns looking for long-term growth.

5. Consider the costs. Even unpaid internships cost the company, as it takes time to hire, train and supervise them for an entire term, sometimes solely by a dedicated manager in-house. Perks and professional opportunities also help attract more qualified candidates. Don’t start a new program without looking at your company budget and employee schedules to see whether the endeavor is something your startup can afford at this time, says Parcells.

6. Get the right second opinion. “If you’re truly weighing the option of unpaid internships at your company, it’s important to consult legal advice to ensure that you’re making the correct decision based on your business and internship program,” says Parcells. Minton echoes that entrepreneurs should seek counsel if former interns feel unsatisfied and threaten legal action.

Related: Are the Days of Hiring Unpaid Interns Numbered?