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Creating an Unpaid Internship

By Edited May 11, 2015 1 0

Give Children an Entrepreneurial Opportunity

Need help in your business but can't afford to hire someone? With an investment of time, you can create an unpaid internship for a deserving child, and provide them with some business experience, a recommendation, a body of work for their first real job, a number of skills that will serve them well in the business world, and a sense of self-esteem or self-worth that will catapult them far ahead of their peers.

Note that you should not try this with your own children. No matter how hard you try, the employer-employee relationship with your own children will never outweigh the more primal parent-child relationship. If you want this oportunity for your own children, help them start their own business, or talk to a friend who owns their own business about creating an opportunity for your children.

First, you must define what skills your business needs. Let's face it, every business needs tedious labour--whether it's renaming files, entering data into a spreadsheet, doing simple Web programming, proofreading, backing up data, loading small boxes, or whatever your business needs, this is a way to create an opportunity for a child or teen. Children as young as ten can be taught to operate a scanner; collate, alphabetize or file papers by date; and answer the phones. They can rename files; order office supplies online; deliver messages; or any one of innumerable tasks that any business must accomplish each day in order to run efficiently.

Second, you must define what you will give your intern in exchange for his or her labour. This might be the opportunity to learn and experiment with specialized skills, such as Web programming or setting up online stores; learning how to proofread; learning music notation; learning to operate business software; or even learning how to operate specialized machinery. If the child has an interest in learning these skills, he or she will often look for more interesting ways to use those skills, and may even come up with suggestions to save your business both time and money. After all, let's face it, children and teenagers are notorious for wanting to make their lives as easy as possible, and they may discover a time- or energy-saving method for making those tedious tasks a little less work!

Next, you should make sure that you are complying with national, state and local laws. There is no substitute for this step. You must consult a business or employment attorney. In the United States, here are the appropriate Federal guidelines:

The U.S. Department of Labor's Wage and Hour Division (WHD) has developed the six factors below to evaluate whether a worker is a trainee or an employee for purposes of the FLSA:
1. The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction;
2. The training is for the benefit of the trainees;
3. The trainees do not displace regular employees, but work under their close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer's operations may actually be impeded;
5. The trainees are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

If all of the factors listed above are met, then the worker is a "trainee", an employment relationship does not exist under the FLSA, and the FLSA's minimum wage and overtime provisions do not apply to the worker. Because the FLSA's definition of "employee" is broad, the excluded category of "trainee" is necessarily quite narrow. Moreover, the fact that an employer labels a worker as a trainee and the worker's activities as training and/or a state unemployment compensation program develops what it calls a training program and describes the unemployed workers who participate as trainees does not make the worker a trainee for purposes of the FLSA unless the six factors are met. Some of the six factors are discussed in more detail below.
Training Similar to Vocational School/The Primary Beneficiary of the Activity
In general, the more a training program is centered around a classroom or academy as opposed to the employer's actual operations, the more likely the activity is training. Also, the more the training is providing the workers with skills that can be used in multiple employment settings, as opposed to skills particular to one employer's operation, the more likely the worker is a trainee. On the other hand, if the workers are engaged in the primary operations of the employer and are performing productive work (for example, filing, performing other clerical work, or assisting customers), then the fact that they may be receiving some benefits in the form of a new skill or improved work habits is unlikely to make them trainees given the benefits received by the employer.
Displacement and Supervision Issues

Employers with bona fide training programs typically do not utilize trainees as a substitute for regular workers. If the employer uses the workers as substitutes for regular workers, it is more likely that the workers are employees as opposed to trainees. As well, if the employer would have needed to hire additional employees or require overtime had the workers not performed the work, then the workers are likely employees. Conversely, if the employer is providing job shadowing opportunities where the worker learns certain functions under the close and constant supervision of regular employees, but performs no or minimal work, this type of activity is more likely to be a bona fide training program; however, if the worker receives the same level of supervision as employees, this would suggest an employment, rather than a training, relationship.
No Job Entitlement/No Entitlement to Wages
Typically, before the work-based training begins, both the employer and the worker agree that the worker is not entitled to a job at the conclusion of the training period or wages for the time spent in training. The parties' expectations regarding the compensation and job opportunities are relevant but not determinative. Even when such an agreement exists, hiring workers who finish the training program is considered in determining whether an employment relationship exists, and frequently hiring such workers suggests that the workers are not trainees. Finally, if the worker is placed with the employer for a trial period with the hope that the worker will then be hired on a permanent basis (even if the worker is not automatically entitled to a job at the end of the period), then the worker is not likely to be a trainee during the trial period.
1. The worker is placed in a classroom setting maintained by an employer to learn to be an electronic technician with no guarantee of future employment with the employer. After the training period, the employer hires the worker (even though the worker was not entitled to a job and most training participants do not receive offers of employment). Because the employer did not benefit from the worker's activities during the training period and the training is very similar to the training that is provided in a vocational school, the training program is likely bona fide,
and the worker is not an employee under the FLSA.
2. A worker who participates in a program at a retail store or restaurant and who assists customers or operates a cash register with little supervision may be an employee because the employer derives tangible benefit (i.e., productive work) from the worker's activities. Also, a worker who performs such work may result in the employer's not hiring an employee whom it would otherwise hire, or result in a regular employee working fewer hours than he or she would otherwise work
– both of which suggest an employment relationship.


Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy [Paperback] [2012] (Author) Ross Perlin
Amazon Price: $10.68 Buy Now
(price as of May 11, 2015)
Controversial and thought-provoking, Perlin examines the issues involved in unpaid internships from several perspectives. Shockingly, most unpaid internships are illegal!

In any case, an unpaid intern should at a minimum expect to learn a valuable skill, get a recommendation if his or her work is satisfactory, and be able to put your company down as an reference. If you're not willing to provide this at a minimum, then perhaps an unpaid intern is not right for you.

Other factors to consider are: negotiating timelines and projects, finding someone else to do the work if the intern turns out to find a task beyond his or her abilities, the amount of time you will spend in training them; the investment in equipment or supplies that they may need, or other factors applicable to your business.

Once you're sure about how an unpaid intern and your business will both benefit, it's time to start advertising the opportunity. In my own case, I am often approached by friends or their children who want to talk about their dreams for the future, and I can often find work for them that will develop or enable them to learn business skills. It never hurts to let your colleagues know that you are on the lookout for someone who is willing to take advantage of an opportunity to learn or enhance certain skills.

Then when you have located a likely intern, it's time to interview them. Make sure they understand what the job will entail. Get them to sign a release of liability form if there is any physical aspect to the work whatsoever. (If they are minors, get their parents to sign.) Remember that this is not an excuse to turn children into slave labour and treat them with the same courtesy, respect, and concern for their safety that you would want someone to show your own child. Negotiate hours, bearing in mind that children need playtime and time for homework, family activities, vacations, and friendships in their lives. In short, be generous--you can afford to!

When dealing with unpaid interns, remember that they are working for you solely for the opportunity. If you have a problem with their work, it is up to you to notice and explain to them exactly what they are doing that is not up to your requirements, and show them how to fix it. If they have a problem with completing assignments, or doing them in a timely fashion, it is your responsibility, and yours alone, to take charge and explain due dates. Some interns may be intimidated and fail to mention that they don't understand how to do something, or they may need some information or supplies they don't have (such as a password to a file, or they don't know where the extra staples are kept). Again, it is your responsibility to them to check and see that they have what they need.

Above all, you must always be positive. In the case of children or teenagers, this is their first experience in the working world. You must ensure that they receive an experience that is worth their considerable time and effort in exchange, and it is certainly best if their introduction to the world of business is a positive one. Although it's true that there are many terrible companies to work for, and a positive experience may not prepare them for that, you don't want your business to be on that list of terrible companies, or worse, be sued and forced to pay huge fines or a settlement!



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