Attorney Thomas Simeone was recently interviewed by fundera.com about full-time
interns and whether they are considered employees, volunteers, or contractors.
Although major companies like Google, Facebook, and Twitter are known for
regularly hiring interns, small businesses can also develop internship
programs of their own. Internships can be beneficial to both the employer
and the intern. The intern is able to earn valuable real-world experience,
while the company receives a fresh perspective and an extra set of hands
to help with day-to-day operations or special projects.
In fact, the number of employers offering internships has increased by
7.3 % from 2016 to 2017. With such a strong labor market, this growth
is expected to continue well beyond 2018. However, before you start hiring
interns for your business, there are several legal and financial concerns
that you should address.
For one, interns can be classified as employees, volunteers, or independent
contractors. Misclassifying an intern can result in expensive fines and
costly lawsuits, which is the last thing you want to deal with as a business
owner. Moreover, the designation you and the intern agree on is not binding
on the government, including the IRS and state employment departments.
According to Thomas Simeone, internships generally don’t fit an independent
contractor model. As attorney Simeone explains, “Many interns are
unpaid or seeking experience. While those are not determinative factors,
they make it more likely that an intern will be considered an employee.
Rarely does an independent contractor work for free or to obtain experience.
Usually, they already know what to do—as evidenced by the lack of
control of the company—and are engaged in a business for profit.”
Interns are also more like employees than independent contractors because
they work on-site at your company, have set hours, and work under the
company’s training and supervision.
Because classifying interns can have serious implications, you should consult
with a lawyer who can help you develop a solid internship program. For
example, if an intern is found to be an employee, the company can be liable
for back wages and penalties.
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