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Compensation

The question of whether or not to pay interns varies among industries and employers. An option to paid internship is to give college credit. Computer, technical and accounting fields tend to pay fairly well for work they expect to be performed by an entry-level staff person. However, the fields of journalism, nonprofit organizations and social services tend not to pay their interns. Instead, those interns may be given college credit as a requirement to obtain their degree.

"Since our interns are expected to do staff level work, we pay them at approximately that same level. Not only are they able to gain experience, but the money earned also can help to finance part of their education," says Meriwether.

Here are some other guidelines for compensating interns:

• The quality of an intern's experience does not depend upon compensation; however, your ability to recruit greater numbers of qualified candidates increases when internships are compensated. Tying an internship to educational credit is a good way to ensure sufficient time commitment from unpaid interns.
• Some for-profit organizations offer a stipend or hourly wage. The advantage of the stipend is that you can avoid adding short-term workers to the payroll. However, be sure to determine and satisfy any federal and state income tax requirements related to paying interns.
• In the case of unpaid internships it's typical for interns to work part time so that they can earn money through another job. Offer other non-monetary rewards, such as employee discounts or free meals.
• Should you choose to use unpaid interns and you're a for-profit organization, be sure that your intern is considered a trainee under the Fair Labor Standards Act.

Legal Issues

Even though interns may spend a short time at your company, there are some legal issues to be aware of. Be sure to consult your human resources professional or general counsel on any legal questions.

"We employ the same guidelines when hiring interns as we do with staff," says Meriwether. "Hiring interns generally involves less paperwork since they are not eligible for benefits."

• With the exception of less-stringent termination and unemployment compensation procedures, the same laws and standards for hiring full-time employees apply to hiring interns.
• International students are authorized to work in the United States once they provide a letter confirming the internship placement. The university's office of international student services will then issue work permission documents that will satisfy federal work requirements.
• Under the Fair Labor Standards Act, you do not have to pay interns who qualify as learners/trainees. The U.S. Department of Labor has outlined six criteria for determining trainee status:
  
  1. Interns cannot replace regular employees.
  2. Interns are not guaranteed a job with your organization upon completion of internship.
  3. Both you and the intern are aware that they are not entitled to wages.
  4. Interns must receive training.
  5. Interns must get hands-on experience with equipment and processes used in your particular industry.
  6. The skills learned on the job must be considered transferable.
• To limit exposure to liability, it is a good idea to cover interns under your workers' compensation policy even when they are unpaid.
• Although interns are not specified in the language of the law, it is best to follow equal opportunity employment laws when recruiting and hiring them.
• An internship should provide training and experience related to a student's academic course of study and career goals. If this is not the case, then the positions are not considered internships and the employer must pay no less than minimum wage.

Recruiting

Finding good interns employs virtually the same strategies and processes used when hiring full-time employees. The key is to have clear criteria for candidates and to build a presence on targeted university campuses.

Don't make assumptions about the skills of interns. Outline from the beginning what your needs are—demonstrated written or quantitative skills, academic major, foreign language fluency, computer proficiency, etc.

Your local university career placement office can help identify qualified candidates once you have outlined clear criteria for positions. A combination of on-campus interviews, attendance at internship fairs or resume referrals from the candidate database can also uncover qualified interns. Building relationships with professors and department heads leads to good candidates.

Tapping into college alumni working at your company is also helpful. "We tend to work with two colleges—Texas A&M and University of Houston," says Meriwether. PKF Texas takes that interaction one step further by sitting on boards that help to determine curriculum requirements at these universities. "Accounting requires specific programs and specific skills. We want to make sure that the future workforce is learning those skills that must be applied in this profession," she says.

Once the internship is completed, it's helpful to get feedback from them on their experience. "One of the main reasons we hire interns is to see what they are like, to give them a trial run. Nine of out 10 times we will extend them an offer of full-time employment," says Meriwether.

"We ask what made them want to come to our firm, what they liked about working with the people, the clients and the work. I think they appreciate the fact that they're treated as members of the team and are getting real-life experience. As an added benefit, students who have had a positive internship experience and have accepted a full-time position will return to campus to promote the firm to possible future interns."

And what if the experience is not good for either party? "Worse-case scenario is that you are under no obligation to extend them a full-time offer," she says. The best way to avoid making a bad hire is to have experienced people interview candidates from the initial campus interview to the office visit. e