3 Considerations for Compensating Interns

While each of us has probably interned for free at one point in our lives, we also all know how much it sucks. As an intern, you’re not only the low man on the totem pole, you’re probably also working your butt off trying to impress your boss and not getting paid to do it. So what gives with the unpaid internship gig?

Well, the establishment of unpaid internships is a no-brainer. Students need experience and companies can offer that experience, without having to pay a dime. As a company looking to find interns, you should probably know that interns often have some experience under their belt and also that many companies are offering to pay them for their internships.


As common as unpaid internships have been in the past, it’s a trend that may be dying out. More and more companies are compensating their interns. The most important piece of this new development is that the companies that are getting on board are getting the best interns.


If you’re gearing up for intern season (a.k.a. summer), then you may be considering your options for compensating interns. Here are three things to keep in mind:

  • If you want the best, be prepared to pay up
    Interns deserve to be compensated for their hard work and time, so the most talented interns will find paid internships. In fact, the best ones are likely to have more than one offer, so you need to compensate to have some type of competitive advantage.

  • Consider it an investment
    An investment of time and money into your interns is one that you’ll want to pay off, probably by making your intern an employee upon graduation. Research also show that interns who were compensated are more likely to accept a full time position at that company. Hosting interns also gives you the opportunity to screen potential employees before committing to hiring an entry-level worker full time. 
  • Make sure you’re in compliance
    If you choose not to offer paid internships, there are a few things you should know so that you’re in compliance. The Fair Labor Standards Act of 1938 defined a six-point test to determine whether or not individuals can participate in an unpaid internship or training program. According to the Department of Labor, the following criteria should be evaluated: 
    1. 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;
    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 the 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; and
    6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

What do you bring to the table?Whether your position or paid or not, it’s valuable for recruiting efforts for you to determine what other benefits you have to offer interns. Can you offer networking opportunities, valuable training in specific tasks or programs or the opportunity to take the lead on projects?

If you are offering financial compensation, these factors will give you even more of an advantage. After a certain financial threshold is met, the added benefits are what really start to put your internship program at the head of the pack. If you’ll be offering unpaid internships, these types of benefits could level the recruiting playing field for you.
However you decide to compensate your interns, consider the traditional “what’s in it for me?” What sets you apart and makes students flock to your company? Honing in on those things could help you recruit top talent, be in compliance with federal regulations and retain that talent far after graduation.

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