[A version of this article was originally published in the Small Business blog at Captain401.com, a fintech company offering 401(k)s for modern employers.]
Despite the appeal of “The Intern,” the recent movie where Robert De Niro plays an septuagenarian intern working for a young entrepreneur, it’s unlikely that you’ll attract a retired executive (or an Oscar-winner) to your small business to fetch coffee and school you in the finer points of leadership.
But that doesn’t mean you can’t set up an internship program that will benefit both your enterprise and the student interns or others looking for a foothold in the business world.
Hiring an intern isn’t complicated but it does take planning to do it right.
You’ll need a three-part program that spells out what will happen before, during and after the internship. And you’ll want to ensure you don’t violate the strict labor laws around internships while you are at it.
What to do before you hire an intern.
You’ll need to decide what you want the intern to do, how the intern’s success will be measured, how long the internship will last and who will supervise the intern. Get feedback from your team as you plan and then put the final decisions in writing.
Your biggest decision will be whether or not the internship will be a paid position. The intern’s job description will depend on that decision because labor law restricts what an unpaid intern can do. Free help is tempting. Who couldn’t use an extra person cheerfully filling in the skill gaps at their small business for no pay? Small firms are especially hungry to find savvy young people to run their social media.
Here’s just one example, from a recent Craigslist ad for an unpaid internship: “A high tech company is looking for an eager intern to help boost the number of social media followers and interactions.”
Here’s a much broader job description from another recent ad for an unpaid internship: “Develop packaging ideas. Determine specific markets. Develop prototype in package. Assist in Branding. Develop roll-out strategy. Develop social network strategy. Help develop sales strategy. Unpaid at commencement, BONUS paid out when product hits the market!!”
And this one, also for an unpaid internship, where the “essential duties” of the full-time job include: “Manage overall production calendars, creative timelines/due dates and facilitate all elements throughout the creative process … finding talent on line, negotiating freelance rates and timelines … ”
Since an unpaid internship is considered under labor laws to be a trainee position, an intern typically shouldn’t be expected to hit the ground running at that level. And while it is legal to have an unpaid intern, labor law, which covers internships, too, rules out many of the common internship practices at small businesses. “Internships in the “for-profit” private sector will most often be viewed as employment, unless the test described below relating to trainees is met,” the U.S. Labor Department spells out in a 2010 intern fact sheet that lists its six-part test.
As an employee, an intern is covered by minimum wage and overtime laws.
The Fed’s criteria make it clear an unpaid intern can’t do the work or take the place of a regular paid employee on an ongoing basis. And as an educational training opportunity, the internship is not to be immediately beneficial to the employer. An unpaid internship also can’t be used as a trial for a job at the company. And while an internship overseen by a school or for which an intern gets academic credit can help meet part of the test, it is not a guarantee that the intern does not have to be paid.
New York state has an 11-part test that builds on the federal guidelines to determine if an unpaid internship is legal. California, which used to have a longer list of criteria, now follows the federal test.
So an unpaid intern is considered a trainee and has to have a different role than a paid intern at your small business.
What to do during the internship.
Have a clear schedule for an intern’s first day, including who will be the intern’s supervisor. If the supervisor is not you, the business owner, be sure you check in with the intern during and at the end of the first day. That gives you and the intern a chance to further communicate expectations and progress. Clear communication is the basis of a success relationship with any employee, including an intern.
It can be tough for a busy small business owner to invest time to work with an intern but it’s the best way to make sure the intern and the company benefit from the relationship.
Expose interns to all aspects of your industry, even if their primary training or duties will be in one area of your particular business. Have a list of colleagues you want them to meet. And share information about industry or professional groups they can become student members of, if appropriate.
Set up performance reviews throughout the internship and use those meetings as additional training and teaching opportunities.
What to do after an internship.
Once the internship is over, follow the post-job steps you will have outlined in your earlier planning. Those could include an exit interview with the intern, debriefing meetings with the intern’s supervisor and writing a formal letter of recommendation for the intern. You could consider posting a positive recommendation on the intern’s LinkedIn profile, if you were happy with the outcome. If that’s the case, be sure to keep in touch with your former intern for post-graduation employment opportunities and as a source for referrals for future intern candidates.
Unpaid internships are tempting but come with a lot of legal hoops through which your small business will have to jump. You’ll have more leeway on the intern’s duties if the position is paid. Either way, setting up an effective internship program takes upfront planning but can be a boost to your small business and the intern, who could be a future colleague, at the same time.
Your small business may be forced to offer a state-run retirement savings plan