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Every year, thousands of college students converge on businesses and staffing agencies in the pursuit of finding career internships with top firms. The reasons vary from needing additional college credit to complete a degree program to the desire for on-the-job work experience to include on a resume. Regardless of the actual reason, there are many benefits to offering paid internships to eager applicants. The most obvious benefits include:


  • Low cost labor for a certain period of time
  • Fresh team members to increase creativity
  • Mentorship opportunities for existing staff
  • Offset staffing shortages with diverse candidates
  • Increasing productivity with up-to-date skills

Of course, the decision whether to offer paid vs. unpaid internships is often on an individual company basis, but there are advantages to paying interns. There are many creative ways in which to include financial rewards as part of an internship program. Here are 3 reasons why you may consider offering paid internships and how to handle this the right way.

Incentives for motivated interns. It’s widely accepted that people work because they want to be productive and they need to earn money. Interns are not unlike regular employees in that they need some type of incentive to do great work. While earning college credits is a positive aspect of being an intern, there are always those who need an extra push. That’s when a baseline pay or bonus program comes into play. By offering incentives in the form of cash or gift certificates, your interns will generally outperform your expectations.

More reliability with interns. One of the biggest issues with hiring interns, particularly those who are inexperienced, is actual reliability. Interns may not take their work hours or duties as seriously as paid employees, because they are not getting paid for their time. It’s important to treat interns as students and not actual employees, so as not to get the status confused. Allow for some flexibility, but remind interns that if they wish to be successful they must report to the internship on time and ready to work.

Increased intern creativity. Offering a stipend or cash incentive to interns can be a great way to get interns to get involved with creative projects. Interns respond well to praise and will generally be more productive if they know there is a reward to be had. Use this sparingly and provide other forms of positive feedback, learning opportunities, and fun incentives along with your payment plan.

However, you should also be aware that as an organization, you must follow strict guidelines as set forth by the Fair Labor Standards Act (FLSA) so that you do not confuse interns with actual employees. The United States Department of Labor (DOL) has provided 6 criteria for distinguishing between minimum wage employees and unpaid interns (or learners). These include:

1. The on-the-job training, although it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school.

2. The training is for the benefit of the student learner, not the company.

3. The students do not displace regular employees, but work under the close observation of a regular employee or supervisor.

4. The employer provides the training and derives no immediate advantage from the activities of students, and, on occasion, the operations may actually be impeded by the training.

5. The students are not necessarily entitled to a job at the conclusion of the training period.

6. The employer and the student understand that the student is not entitled to actual wages for the time spent in training. (This does not apply to bonuses and gifts)

(Adapted from the US Department of Labor, Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act)


If you have questions about offering paid internships and want to tap into this excellent resource, be sure to contact TempStaff today!


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