Interns can boost your business by handling tasks you don’t have time or expertise for. When you hire interns, though, make sure you don’t run afoul of laws and sensible practices. Consider these five questions:

Do You Need to Pay Interns?

The Fair Labor Standards Act (FLRA) governs whether interns need to be paid the minimum wage and overtime. The act raises six criteria for unpaid internships; including that the internship is similar to training that would be given in an educational environment, the intern works under close supervision of existing staff and does not displace regular employees, and the employer derives no immediate benefit from the activities of the intern.

Whether your company benefits from an intern’s work has a big impact on what tasks you can have unpaid interns perform. Caron Beesley, who writes for the Small Business Administration blog, explains: a bakery can allow an unpaid intern to decorate a tray of cookies as a training exercise.  However, cannot sell these cookies since the profit earned from that sale would benefit the bakery.

How Much Should You Pay Interns?

Paying an intern allows them to legally perform work that contributes to a company’s operation, such as documenting inventory and answering emails. Furthermore, it’s worth compensating your interns appropriately if you want them to handle critical tasks, like boosting your social media effort.

“We recommend that small businesses pay at least minimum wage, but more for certain majors including computer science, design, and finance which are highly competitive for top talent (amounts can vary by region but for those roles around $15/hour is good),” says Nathan Parcells, co-founder of Looksharp, a company that matches interns with with available opportunities. “Small businesses can pitch students on the opportunity to get a lot of responsibility, which is more important than money, but paying at least minimum wage is the law and the right thing to do.”

Glassdoor, a job recruitment site, provides a list of what companies pay for interns depending on the tasks they handle.

Do You Have to Provide Health Coverage to Interns?

Probably not, but it depends on the details, according to attorney Sharon Quinn Dixon.  If you over 50 employees who work more than 30 hours a week, The Affordable Care Act indicates that the company needs to offer coverage within 90 days of hiring. The ACA is likely not applicable in the following situations:  if the internship is unpaid or if the intern is hired for a duration of six months or less.

Can You Claim a Tax Credit For Summer Workers?

If you hire a 16 or 17-year-old who lives in a federally-designated empowerment zone between May and Sept. 1, you can get up to a $1,200 credit. Use IRS Form 5884 to figure out your credit through the Summer Youth Program.

What Should the Intern Agreement Say?

The agreement for an unpaid internship must include the length of the internship.  In addition, the agreement must also include a statement indicating that no payment will be provided to the intern.  It should also explain the type of educational training the intern will gain from the experience. Parcells provides a Sample Internship Offer Letter to help businesses craft a basic offer letter for new intern hires.

Readers should not consider this article legal advice. If you have questions, consult your attorney.

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