Intern or Employee?

Legal considerations when hiring an intern or student

Hiring an intern or student is a great opportunity for an employer to participate in the local community and to screen and train individuals who may become permanent employees later on.  However, employers who wish to utilize intern or student services must be aware of the laws regarding the retaining of such individuals.

In some cases, interns may be unpaid.  In determining whether an intern may be unpaid, the U.S. Department of Labor (DOL) looks at all of the facts and circumstances of the internship, and applies the following factors:

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

Of course, an employer always is free to pay its interns in accordance with the applicable minimum wage and overtime laws, whether or not the above factors are present.  As discussed further below, doing so may be to the employer’s benefit.

A full-time student working for an employer must be paid but a retail or service employer can obtain a certificate from the DOL permitting such students to be paid at 85 percent of the minimum wage.  The certificate limits the hours that the student may work to eight in a day and 20 in a week when school is in session and 40 hours in a week when school is out. In addition the DOL also offers a student-learner program (for which a certificate also is required) in which a high school student, of at least 16 years of age and enrolled in vocational education, may be paid at 75 percent of the minimum wage.

Employers wishing to take advantage of these DOL programs should be aware that the regulations governing them are complex and they are advised to seek legal counsel.

Generally, in regard to the former program referenced above, a full-time student generally meets all the requirements below:

  • Individual receives primarily daytime instruction at a physical location of a bona fide educational institution, in accordance with the institution’s accepted definition of a full-time student.
  • Individual is at least 14 years old.
  • Individual’s employment does not reduce the full-time employment opportunities of other persons.

Employers who do not wish to apply for participation in the above programs of course may hire and pay student workers in accordance with the applicable minimum wage and overtime laws.

Some general recommendations before starting the process of hiring interns or students are as follows:

  • Be sure to have a clear job description related to each opening to ensure that expectations are understood on both sides.
  • Do have a training program for those who have not previously worked in your business/industry. A day to a week of good mentoring often leads to worker who needs little supervision going forward and who can return to your business during their next vacation period as a valued employee.
  • In these types of positions, it may benefit you more to hire based on attitude rather than on skill. Virtually every employee can be taught the skills required to do the entry level jobs offered. However, not everyone will be a personality fit for your organization…and those attributes cannot be easily changed.
  • Although, as discussed above, students and interns may be paid less than minimum wage or be unpaid, in the long-term that may not be in your best interests. As with your permanent employees, those workers with great attitudes and skills bring much more benefit to your business. Fair pay generally results in better attitudes and greater skills.

BY Abby Duncan of Duncan Resources and Daniel Ritson of Archer & Greiner, PC.  Duncan Resources specializes in helping owners of small businesses better hire, train, manage, and evaluate their employees.  Abby can be reached at 973-256-8443 or   Archer & Greiner is a full-service regional law firm. Dan provides high quality, results-driven employment law expertise to corporate clients.  He can be reached at 201-498-8513 or


Please note that this article is for informational purposes and does not constitute legal advice.

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Meadowlands Magazine

Meadowlands Magazine

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