Mr CEO I heard you found a source of cheap labor, not so fast

Almost every college career services department in the country pushes to area employers the benefits of using their internship program. On the first look it is a no brainer for the corporation. They get added manpower during heavy workload times and they can usually get it without any financial impact on the corporation. For the student it provides them with some work experience in the real world and exposure to varying industries from which they can plan out their career.

Unfortunately some organizations have chosen to take advantage of the concept in order to reduce headcount expenses. Ever hear of these scenarios:

  • HR and/or the hiring manager interviews a prospective candidate and suggests in order to view their work ethics would the candidate be willing to work on a project with no compensation.
  • A school wanting to screen a prospective teacher asks them to cover a class for a couple of days as part of the evaluation process at no pay.

The concept sounds good but based on complaints the U.S. Department of Labor has said wait not so fast. It is entirely possible that your great thoughts might be a violation of the Fair Labor Standards Act. In order to be sure that your organization is on safe grounds when using an individual as an intern, the DOL says the following conditions must be in place.

  1. The internship, even though it includes actual operations of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship;
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship

While the concept of having an intern within your organization is appealing, the motivation behind the use of an intern is heavy with risk for the organization. As a human resource professional it is your responsibility to ensure that the use of interns within the organization is not abused. It is the role of HR to foresee the potential improper use of human capital assets as interns. Failure to do so can mean that the financial impact on the corporation can outweigh the benefit of their use. Be sure to check with your corporate employment counsel to make sure that all the criteria are properly met.

So Mr. CEO you may have found that source for cheap labor, jut don’t jump the gun before you make sure that the corporation has evaluated the risk of bringing on an intern and not in violation of the FLSA. It is for your ability to sleep at night to ensure that t is done right.

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