• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

MidwestHR

My WordPress Blog

  • Home
  • Services
    • Employee Benefits
    • HR Outsourcing
    • Payroll and Tax Admin
    • Workers Compensation
    • Retirement Services
  • About
    • Company Info
    • Leadership
    • Why We Are Different
    • What is a PEO?
    • Midwesthr Gives Back
    • Scholarship Award
  • Blog
  • Contact Us
  • Login
    • Client Login
    • Employee Login

Blog · Published: May 10, 2017 Updated: January 13, 2022

Do Companies Need to Pay Summer Interns?

Summer InternsWith the end of school approaching, companies wanting to hire a summer intern should develop a plan. According to the Department of Labor (DOL), interns must be paid minimum wage and overtime unless they meet ALL six criteria to be an unpaid trainee. Whether a paid or unpaid internship, there are many things to consider.

Unpaid internship

According to the Fair Labor Standards Act (FLSA), the DOL has a fact sheet detailing each criterion that must be met for a company’s unpaid internship program to qualify for exclusion. In general, the internship must provide the intern instruction similar to what they’d receive in the classroom. The employer does not reap advantage from the intern’s activities and in fact, working with the intern may occasionally slow down operations. The skills learned can be used in other employment settings beyond the internship. Often this type of unpaid internship is developed with oversight from a college or university as a program requirement and/or with educational credit.

Do the same requirements apply to nonprofit organizations? It’s less clear. The DOL fact sheet states unpaid internships are “generally permissible” for a “nonprofit charitable organization.” “Generally permissible” is not defined by the DOL. That leaves a nonprofit organization vulnerable to an FLSA claim from an unpaid intern. Another consideration is defining the role as an intern or volunteer. A volunteer works without expectation of being paid but the organization can pay work-related expenses and a stipend. The stipend may cause the DOL to classify the volunteer as an employee, which requires them to be paid minimum wage. The nonprofit would also be responsible for any back taxes. By reimbursing expenses but forgoing a stipend, nonprofits can guard against this liability.

Paid internship

It’s important to develop a paid internship program that reflects your company values. Are you looking for affordable help or is your company dedicated to educating and financially supporting students interested in your industry? Research your marketplace to understand the industry standard for wages. By law, FLSA guidelines require minimum wage and overtime pay. If you’re looking to attract top candidates, consider paying more than the industry standard. A paid internship can be used as a trail period before offering them full time employment.

MidwestHR, a top professional employer organization (PEO) in Illinois, has been helping clients with these kinds of HR questions for 20 years. By outsourcing your HR with us, we help you develop an internship program that brings value to students and your business while protecting your organization from liabilities. Interns can bring a fresh perspective and perhaps a future business leader! Give us a call 630-468-9286 to discuss the type of internship program you’d like to develop.

Filed Under: Blog

Charmaine Hollaway

Working in the Professional Employer Organization industry since 1993, Charmaine has been involved in almost every aspect of PEO services. In her role as the Managing Director of HR & Benefits at MidwestHR, she oversees all HR compliance and employee benefits in addition to managing retirement plans.

Previous Post: « Do Companies Lose Control With A PEO?
Next Post: What Is Employee Benefits Outsourcing? »

Primary Sidebar

Recent Posts

  • Can HR Software Help Your Company?
  • Top 10 Ways to Prevent Payroll Fraud
  • What are the Pros and Cons of Working With a PEO?
  • MidwestHR Giving Tree Returns for 2021
  • 2022 HR Law Changes and Trends

Footer

Follow US

  • Twitter
  • Facebook
  • LinkedIn
  • Yelp
  • BBB
  • UpCity
  • YP
  • Superpages
  • Clearly Rated

Navigation

  • Home
  • Contact Us
  • Careers
  • What is a PEO?
  • Healthcare Reform
  • Resource Center
  • Coronavirus COVID-19 Resource Center

Woodridge Location

MidwestHR, LLC
1200 Internationale Pkwy
#200
Woodridge, IL 60517
630-468-9286

Loop Location

MidwestHR, LLC
300 N LaSalle Dr
#1865
Chicago, IL 60654
630-468-9286

CPEO - IRS CertifiedNAPEOAudited Financials
*The IRS does not endorse any particular certified professional employer organization. For more information on certified professional employer organizations go to www.irs.gov.
© 2025 · MidwestHR, LLC · Privacy Policy · Terms · SUPPORTING BUSINESSES SINCE 1997