Legal Best Practices for Hiring Unpaid Interns: An Employment Lawyer Exclusive

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By Evan White
| Employment Our Attorney Network

This post is part of Priori’s blog series “From Our Network,” where we feature lawyers in our network discussing important issues small businesses face. After every post, we give our readers a chance to ask the lawyer questions, and the lawyer picks several to answer. In today’s post, employment lawyer Evan White answers reader questions about the various rules and regulations a New York small business must follow to hire unpaid interns.

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Do the same rules apply to not-for-profit organizations?

In New York, not-for-profit organizations can keep unpaid interns on the same terms as for-profit organizations, but nonprofits also gain access to three additional categories of legal unpaid intern: "Volunteers," "Students," or "Trainees/Learners." Each of these categories has its own requirements, limitations, and factors, much like the requirements for unpaid internships in the for-profit world. Only not-for-profit organizations set up and operated strictly for charitable, educational, or religious purposes can hire unpaid interns under any of these three categories.

Unpaid volunteer interns cannot replace paid staff, cannot do anything but tasks "traditionally reserved for volunteers," cannot be required to work certain hours, cannot be under any contract for hire by any other person or business, and cannot be paid for their services beyond reimbursement. "Volunteer work" that they perform must be completely different from "employee work."

In order to qualify as an unpaid student intern, the interns in question must be students. That is, they must be attending an institution of learning with courses that will eventually lead to a degree, diploma, or certification, or they must be fulfilling residency requirements, such as those required for a medical degree. The New York State Department of Labor also imposes a variety of recordkeeping requirements for the hiring organization, and a statement from the student's school.

"Trainee" and "Learner" interns may be unpaid if they are enrolled in a bona fide training program operated by a not-for-profit organization set up and operated strictly for charitable, educational, or religious purposes. This program must involve specialized, direct formal instruction and on-the-job training, with the trainee only assuming limited responsibility and being under supervision or guidance. The program must be for a limited duration (typically between 2 to 10 weeks), and have an "appropriate" trainee-trainer ratio. As usual, the New York State also imposes a variety of recordkeeping requirements for the hiring organization.

I run a very small company--and historically, I've had 1-2 unpaid interns over the summer. I'd like to continue doing that, but the compliance requirements seem like they only make sense for bigger companies. For instance, in my company, everyone pitches in for everything (events, big presentations)...Some of it is definitely "educational" but I don't have the time or energy to design a whole program. How do I handle that? Can I still have unpaid interns?

Unfortunately, no matter how large or small you are, the requirements are the same. That said, there are things small businesses can do to help their unpaid internship programs be more compliant, just like larger businesses. Mentoring, providing academic credit, taking time out of the day to actively train interns in a specialized field, and other similar "best practices" can be done regardless of the size of the business, although certainly smaller companies will have less resources to apply in this regard. It is difficult to provide advice on crafting an internship program that works for a particular company without knowing more details about that company, however.

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