Everything you need to know about hiring interns

Despite what you might think, hiring interns isn’t reserved exclusively for large corporations. In fact, small business internship programs can provide many benefits and are quite common.

An internship program, whether built for high school or college students, can be a great way to get temporary assistance during peak times in your industry. It can also give you the chance to relay the knowledge and skills you and your team have acquired. 

You don’t need a vast set of resources to run a worthwhile program. It’s easy to adapt their model to fit your business. And it can result in the implementation of a strategy that benefits both your business and your community. 

First, know the laws and regulations

Hiring interns begins with learning federal, state, and local laws. The average internship pay in the United States is $13.96 per hour. However, the Fair Labor Standards Act only requires you to pay them minimum wage—and in some cases allows you to establish an unpaid internship program. 

Unpaid internship rules 

The circumstances that allow for unpaid interns are laid out in the US Department of Labor (DOL) “primary beneficiary test.” The test requires you to provide training similar to what the intern would receive in an actual educational environment like a classroom or lab. 

The test also prohibits you from replacing an actual employee with an unpaid intern and requires that the program primarily benefits the intern. In order to qualify, you must meet seven requirements: 

1. The intern and employer must clearly understand that there is no expectation of compensation. Any expressed or implied promise of compensation suggests that the intern is an employee.
2. The internship must provide training similar to that of an actual educational environment, including clinical and hands-on training provided by a learning institution. 
3. The internship program needs to be tie in the intern’s formal education program through integrated coursework or academic credit. 
4. The program must accommodate the intern’s academic commitments by corresponding to the academic calendar. 
5. The business needs to limit the program duration needs to the period in which the internship provides beneficial learning. 
6. The intern’s work must complement, rather than displace, the work of paid employees while providing significant educational benefits to the intern. 
7. The intern and employer understand that the program is conducted without entitlement to a paid job at the end of the internship. 

Paying interns 

If your internship program doesn’t meet the qualifications to classified as unpaid, the same federal laws that dictate how you pay other employees apply to your interns. When you hire interns you must pay them at least the federal or state minimum wage, whichever is higher. If they reach overtime, they must be compensated at the appropriate rate for the extra hours. 

However, if you run a student-learner internship program you may be able to pay a subminimum wage. We’ll get into that below. Check your state and local laws to better understand what rules are in place in your area in terms of paying employees. 

Student-learner internship program

If you are looking to hire high school students over the age of 16 (or over 18 for hazardous jobs) for a work/learning experience, you can utilize a student-learner internship program. 

These programs are often coordinated through high schools and trade associations and often allow a business to pay the student worker 75% of the state minimum wage for part-time work. Reach out to your local high school, community college, or trade school to find a program that works best for your business. The organization will likely provide guidance on how to align your program with the student’s curriculum needs. 

To qualify for a student-learner internship program, your business must be registered through the US DOL. Additionally, the student must attend an accredited school. 

You’ll need to apply for an authorizing certificate from the US DOL. To do so, complete form WH-205 and have it signed by the appropriate school official, as well as the student learner. Do this for every participating student, and then send them to the address below: 

U.S. Department of Labor
Wage and Hour Division
Attn: National Certification Team
230 S Dearborn St
Room 530
Chicago, IL 60604-1757

Note: there are also child labor laws you’ll need to adhere to if you are hiring students under the age of 18. Take a look at our guide to legally hiring minors to learn more. 

College credit internships 

Like student-learner internship programs, interns for college credit—whether paid or unpaid—are often organized through educational institutions. Partner with your local college or university to locate interns in need of credit. 

The institution will likely walk you through what a solid internship strategy should look like in order to fit the guidelines and help you find students who would benefit from your program. 

The school may require you to submit written agreements between you and the intern, as well as a progress report on how the student is performing at certain intervals. Be sure to keep up with these requirements or you could risk losing your reputation as a reliable intern host. 

Create a meaningful internship program 

Before you start your recruitment process, define what your intern’s role will be in your business. When doing so it’s important to remember the purpose of an internship: a chance to perform meaningful work that will prepare the student for their future career—not a cheap way to catch up on filing that paperwork taking over your desk. 

Your program should focus on a skilled trade necessary for your industry. Activities can range from learning the behind-the-scenes office work to better understanding what it takes to smoothly run a retail shop, restaurant, manufacturing workshop, or whatever type of business you operate. 

However you decide to define your intern’s job, build an outline of the projects you want them to tackle, what you want them to learn, and how you plan on teaching them. 

Work a few hours a week into your schedule to provide guidance, but there’s no need to stress about how much time you are putting in as a business owner.  Even just spending an hour a day mentoring your intern can help get them on the right track to gaining valuable experience. 

Additionally, identify a quality team member to act as a leader for your interns and can be there to answer questions or assign tasks when you are not. 

Handle the details of hiring interns

Once you lay out a plan and define the role, it’s time to find your intern and hire them. The first step is to write a quality job description. Include the required duties, what type of training they will receive, and what their work schedule will look like. ‘

You’ll also need to specify what department they will be focusing on and what kind of experience they can expect to gain. For example, let’s say your business specializes in creating custom furniture. 

You would let the potential intern know that you would primarily mentor them on how to safely and effectively perform the skill, while also learning the ins and outs of keeping a workshop in good shape and customers happy. 

If you need help, Homebase can provide you with pre-written job descriptions that you can tailor to fit your needs. 

Next, identify the appropriate institutions you need to reach out to in order to establish your program, as mentioned above. You can also find interns online through the top job boards. Homebase can also help with this. We’ll post your optimized job description to the best sites like Indeed, ZipRecruiter, Craigslist, and more. 

Hiring interns at your small business can be mutually beneficial for all parties involved. You’re helping students prepare for their future. And they are providing assistance to your team members as they work their way through the mentoring process. 

As long as you create an honest program that you conduct with respect to all participants, you’ll reap the rewards of a fulfilling opportunity.

And if you need help with the process, get started with Homebase Hiring. We’ll post your job description on the leading sites and help you find the perfect candidate. We’ll even streamline the onboarding process by sending your new hires a digital packet.