Legal Issues

The legal issues that are presented on this page are not intended to constitute all of the legal responsibilities that an employer incurs when hiring an intern. The laws change from state to state and also with the type of employer. Non-profit agencies, government agencies, and privately owned companies may have different rules that affect them. For a better understanding of your organization’s legal rights and responsibilities when hosting an intern, consult with your organization’s attorney.

Civil Rights

Employers are required to utilize the same non-discrimination guidelines when hiring interns that they observe when hiring part-time and full-time employees.

Harassment

Interns are protected from harassment under the same laws that govern employees. If an intern was the initiator of harassment against an employee of the organization, the intern would be dealt with in a fashion similar to an employee.

Liability

As long as the intern is an enrolled student at the University of Maine, the University’s liability insurance will cover her at the internship site. Employers are required to provide the intern with a safe working environment that lives up to OSHA standards and includes all necessary safety equipment and training.

Unemployment Compensation

Student interns are typically not able to collect unemployment compensation at the end of the work period.

Noncompete and Nondisclosure Agreements

Some co-op students and interns are being asked to sign noncompete and/or nondisclosure agreements. Nondisclosure agreements prohibit students from relaying information about a company’s products, processes, and other information to future employers. The noncompete agreements, once signed, forbid students to work for a competing company. As a result of companies asking students to sign these agreements, some schools are not allowing them to participate in internships and co-ops with their students. In general, noncompete agreements are difficult to enforce when interns are involved and enforceability depends upon the reasonableness of the restrictions and whether sufficient legal consideration was given to the student in exchange for the promise not to compete.

Criteria Used to Determine if the Employer Needs to Pay an Intern or Co-op Student for Their Experience

The following comes from the National Association of Colleges and Employers: “The answer to this, does the employer have to pay the intern for his or her work, lies in an analysis of the on-the-job experience the individual will have in relationship to the standards set forth under the Fair Labor Standards Act, which requires employers to pay at least the minimum wage to employees.”

In order for a student worker to be considered an intern the following criteria should be met:

  • The work needs to be an integral part of the student’s course of study.
  • The student will receive credit for the work, or the experience is a requirement for graduation.
  • The student needs to prepare a report of his/her experience and submit it to his/her faculty coordinator.
  • The employer needs written documentation from the school that the experience is educationally relevant.
  • A learning contract with clear goals needs to be drafted and signed.
  • The student does not perform work that other employees perform.
  • The student is shadowing or learning from a mentor/on-site supervisor.
  • The employer provides the student the opportunity to learn skills relevant to the business and career field.
  • There is educational value in the work the student is responsible for and it is related to the student’s field or study.
  • The student is supervised at the worksite.
  • The student does not provide benefit to the employer for more than 50 percent of the time.
  • The employer did not guarantee the student a job upon completion of training or completion of schooling.

Can the experience be considered a volunteer experience by the organization?  The Department of Labor considers a volunteer a person that  provides services to a public agency for “civic, charitable, or humanitarian reasons” without compensation or the expectation of compensation.

Reference
Winter 2003 issue of the NACE Journal