Nation & World

More employers paying interns - even as rules make it easier not to

New federal rule is more flexible for employers

FILE PHOTO: A job seeker holds a “We’re Hiring” card while talking to a representative from Target at a City of Boston Neighborhood Career Fair on May Day in Boston, Massachusetts, U.S., May 1, 2017.   REUTERS/Brian Snyder
FILE PHOTO: A job seeker holds a “We’re Hiring” card while talking to a representative from Target at a City of Boston Neighborhood Career Fair on May Day in Boston, Massachusetts, U.S., May 1, 2017. REUTERS/Brian Snyder

The nearly 100 interns arriving at Under Armour’s Locust Point campus from colleges around the country this summer will meet top executives, help design and sell sports apparel and learn to solve business challenges, all while earning a paycheck.

Summer interns at Travelers Insurance and Johns Hopkins also are getting paid.

New federal guidelines have made it easier than ever for employers to count interns as non-employees — and not pay them. But despite the changes, more employers are offering interns wages to go with the experience they gain.

Bryan Kaminski, Under Armour’s director of university programs and recruiting, says paying the equivalent of entry-level salaries to interns, whom the company views as an extension of full-time workers, helps make those positions accessible to more people. This year more than 17,000 students applied for 98 spots.

“We get a lot of benefits,” Kaminski said. “Our interns bring energy. They bring perspective. ... They bring passion about the brand.

... We’re making sure that we’re competitive in the market and that we’re able to attract great talent. We’re going to continue to invest in the development of students and invest in the future of the workforce.”

Evan Robertson felt lucky to have snagged an internship on Wall Street this summer. The Morgan State University finance major will work for Bank of America Merrill Lynch in sales and trading. And he’ll get paid over the 10 weeks as an entry-level analyst.

Robertson, a 19-year-old rising junior from Northeast Baltimore, doubts he would have applied for the job had it been unpaid.

ARTICLE CONTINUES BELOW ADVERTISEMENT

“I believe having that benefit will motivate you to work even harder and take the internship more seriously,” Robertson said.

An unpaid internship “is like doing free work. Any student’s time is more valuable than that. In these positions, they give you real work to do, work that will help the firm and increase productivity.”

Robertson said he hasn’t come across many unpaid internships in his field. Last summer, he worked as an intern in At&T’s construction and engineering division, also paid.

Lines separating paid and unpaid internships haven’t always been clear. The Fair Labor Standards Act requires employers to pay employees — but students and interns are not always considered employees.

Before the U.S. Department of Labor updated its guidelines in January, employers were required to prove each of six factors before they could take on an unpaid intern as a non-employee. The new rules establish a test to determine the primary beneficiary of the work. If the intern benefits more, the employer does not have to pay.

The changes stemmed in part from lawsuits brought by interns over the past few years.

Courts have identified seven factors as part of the new test. One looks at the extent to which the internship provides training similar to an educational setting.

Another weighs the extent to which the intern’s work complements, rather than displaces, the work of paid employees.

Employers can use any of the factors to make a determination.

Michael Schmidt is vice chairman of the labor and employment department of the New York law firm Cozen O’Connor.

ARTICLE CONTINUES BELOW ADVERTISEMENT

Thank you for signing up for our e-newsletter!

You should start receiving the e-newsletters within a couple days.

“The new federal rule has provided much more of a flexible test for employers, which is probably better for employers across the board,” he said.

It’s still unclear how the changes will affect intern programs, Schmidt said, particularly because state labor laws can differ from the federal guidelines.

Schmidt believes the new rules could have far-reaching implications. Businesses worried about complying could stop hiring interns rather than run afoul of the law.

But others could reexamine their programs and restructure them to comply.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

CONTINUE READING

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.