Jordan Ramis pc. Attorneys at law
Unpaid Interns
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This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

Spring 2010

In this economy, it's certainly tempting to add a couple of unpaid interns to your business, especially over the summer months. Students need real-life work experience, and you need some extra hands — it sounds like a good deal for everyone.

But not so fast — Oregon has been cracking down on employers who use unpaid interns as free labor. Recent articles in the New York Times (April 2, 2010) and Oregonlive.com (April 21, 2010) have pointed out that the Oregon Bureau of Labor and Industries is taking a long, hard look at unpaid summer internships. In two cases last summer, BOLI required employers who hired unpaid interns to pay back wages and penalties, finding that the interns were actually employees.

Oregon has very specific requirements for what constitutes an unpaid internship; everything else constitutes an unfair labor practice. To keep from having to pay penalty wages later, be sure that your internship program meets ALL six of these requirements:
  1. The internship, even though it includes actual operation of the facilities of the employer, must be similar to training that would be given in an educational environment.
  2. The internship experience must be designed for the benefit of the intern.
  3. The intern may not displace regular employees but works under close supervision of existing staff.
  4. The employer that provides the training may derive no immediate advantage from the activities of the intern (on occasion its operations may actually be impeded).
  5. The intern may not be promised a job at the conclusion of the internship.
  6. The employer and the intern must understand that the intern is not entitled to wages for the time spent in the internship.
If you want to reduce potential liability for using interns, consider partnering with a local high school, college, or university. The educators there can assist in the design of an internship that furthers the educational process and which is designed to benefit the intern.

An intern should not have an expectation or promise of employment at the conclusion of the internship. One way to avoid this is to establish at the outset of the internship that it will be for a fixed duration.

If you're not able to create an unpaid intern position that meets these standards, you can always pay interns minimum wage and overtime to avoid penalties later on.

The overriding principal is that an intern is here to learn, and if you're interested in having an unpaid internship program, your primary focus should be to teach. Don't expect interns to improve productivity. Your existing staff will have to expend additional time supervising and teaching the intern, which may actually decrease productivity. But, having a functional unpaid internship program is still one way to find future qualified employees who are better prepared to join the workforce because of the training you provided.