Wednesday, April 07, 2010

Internships: You have to pay for what you get

It's Springtime, and both employers' and students' thoughts are turning to internships. Companies see interns as a way to get cheap help, and students look at internships as a way to get work experience and a "foot in the door" for a future job. However, it's very important for employers to recognize that they have to pay interns for their work. Both the US Federal Government and many state governments are cracking down on unpaid internships. Employers that are caught may be liable for back wages for their interns, unemployment and Social Security taxes on those wages, and penalties.

Many years ago, it was common for companies to offer unpaid internships in return for college credit and/or work experience. Today, however, in most areas you have to pay at least the prevailing minimum wage for the hours that interns work. I'm seeing many postings around the web soliciting unpaid interns for startups and small businesses. If you're an employer, that "free" labor isn't free and could cost you much more than if you simply paid an hourly minimum wage.
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