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What business owners need to know about unpaid internships - III

In a series of ongoing posts, we've been discussing how even though employers may be intrigued by the prospect of having some college students join their team as unpaid interns during the summer break, they will nevertheless want to ensure they don't inadvertently expose themselves to potential liability by taking this step.

To that end, we've been discussing the different approaches taken by the courts to ascertain the existence of an unpaid internship, including the longstanding six-factor test introduced by the Department of Labor, and the more recent primary beneficiary test developed by the U.S. Circuit Courts of Appeals for the 2nd and 11th district.    

Having established this -- and the fact that the DOL's six-factor test is the controlling examination here in Tennessee -- today's post will shift gears by discussing what those employers eager to pursue an unpaid internship program can do to protect their interests.

According to experts, some factors that employers will want to keep in mind when starting an unpaid internship program include:

  • Establish a formal program complete with firm start and end dates
  • Highlight the training/supervisory aspects of the program while also allowing interns to put the instruction received to use
  • Keep a log of hours worked
  • Provide the intern with an offer letter clearly indicating that the position is unpaid and employment is not guaranteed
  • Take steps to ensure the intern isn't being used as a substitute for a paid employee or on some sort of trial period
  • Establish a strong educational component, perhaps coordinating with schools for interns to secure academic credit
  • Indicate in job postings that applicants who will receive college credit are preferred

Given the degree of preparation required and the potential exposure, many experts indicate that employers should simply consider paying their interns minimum wage, limiting their hours and complying with applicable employment laws.

Here's hoping the foregoing discussion has proven helpful.

As always, consider speaking with a skilled legal professional if you are a business owner with questions or concerns relating to an employment law matter.

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