Guidelines for setting up an unpaid internship program:

Internships provide an excellent way to prepare students for the workforce, provide hands-on training and launch careers. For nonprofits, it’s an opportunity to help shape the emerging workforce, nurture an interest in the nonprofit sector and discover potential new employees.

For many of us, an intern also provides some much needed free assistance. This view, however, could lead to trouble. There have been several cases where an employer has been forced to pay back-wages to someone who completed an unpaid internship. While for-profit companies have been looked at closer than nonprofits, it is still a good idea to understand the guidelines.

Below, we’ve provided a summary of the criteria for an unpaid intern position. Plus, with input from Center member Miriam’s Kitchen, we’ve also provided a helpful checklist for setting up an internship program.

Criteria for an unpaid internship

In the Department of Labor’s internship programs under the Fair Labor Standards Act, it explains how courts have used the “primary beneficiary test” to determine whether an intern is in fact an employee. A summary of the test criteria that the internship must meet includes:

  • Be similar to training that the student would receive in an educational environment. If a college provides credit or if the intern gains experience that could be used elsewhere, this would fit the criteria.
  • Be a benefit to the intern, not the organization.
  • Not replace a paid employee, and work under close supervision of a staff member.
  • The employer gets no real advantage from the intern, and sometimes may be impeded by having the intern.
  • The intern is not entitled to a job at the end of the training.
  • The employer and intern agree that the intern is not entitled to wages at the end of the internship.

When considering offering a stipend, understand that it may send mixed signals to the DOL. Either the wages are earned, or this is a training program that benefits the intern.

Internship Program Checklist

  1. Define the need. Determine what department or team could use an intern in a way that benefits the student as well as the organization.
  2. Determine the time and duration. Will it be a semester long, over winter break or during the summer? Knowing the duration will guide setting the number of hours per week and what duties to include in the program. Students may have less time during the academic semester than over the summer. Every internship should have an end date. The DOL does not let you keep an intern indefinitely.
  3. Specify the roles and responsibilities of the intern. Create a description of tasks and a timeline with check-ins to monitor progress. Include rules, policies and expectations so the intern, and your team, understands what is required right from the start. Make sure tasks/projects are reasonable and realistic.
  4. Decide if the intern will be paid, receive a stipend or be unpaid. Obtain approval from President/CEO for any payments. For unpaid internships, answer the following questions:
  • Will the intern receive course credit?
  • Are there written goals and objectives associated with the internship?
  • Is the student’s on-the-job learning beneficial to his/her future career?
  • Does the intern understand that the internship is unpaid?
  • Does the program pass the “primary beneficiary test?”
  1. Advertise the internship opportunity. Post online, on your website, circulate with colleges and universities.
  2. Collect and review applications, sharing best candidates with the hiring department.
  3. Conduct interviews either in person or via Skype.
  4. Once a candidate is selected and has accepted, complete an intern information sheet with details about criteria, school requirements and credits, etc., as well as any HR forms and return to HR.
  5. Make sure interns have an opportunity to engage with staff at multiple levels and get the most out of their experience. Consider including a rotation through several departments.
  6. Ask for feedback. At the end of the internship, ask for the intern’s perspective and input about the experience. Re-evaluate your program and adapt if needed. This is also the time to share feedback with interns about their performance.

If you have other suggestions, please share them!

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