One of the most common extracurricular learning experiences for a student is the summer internship. According to the National Association of Colleges and Employers (NACE), around two-thirds of 2015 graduates had some internship experience by the time they graduated.
Interestingly, businesses paid less than 60% of these interns for their work. In retrospect, some unpaid interns argued that they were unlawfully exploited and have joined class-action litigations against companies such as NBCUniversal and Fox Searchlight. You don’t want to end up in those shoes as a business.
Obviously, businesses don’t value internships just for the cheap student labor; internships are arguably more important for connecting with talented future employees. And for students, internships–paid or unpaid–are important for reinforcing formal education, helping learn new skills, testing the waters of a potential full-time employer, and becoming more marketable to other employers. In fact, according to NACE’s survey, 56.5% of students with internship experience received at least one job offer upon graduation, compared to only 36.5% of students without a past internship.
So, it may seem reasonable that a student would want to spend a summer gaining internship experience regardless of compensation. But at what point can students have too much unpaid experience? Where’s the line where businesses begin exploiting interns?
The average paid undergraduate intern earns between $14-$18 an hour, depending on his or her grade and major. With around 7 in 10 students graduating with an average of $29,000 in debt, being paid for an internship can make a world of a difference.
Technically, the law is on the students’ side. According to the Department of Labor, the focus of an unpaid internship should be the students’ learning. If student interns displace other employees or “give immediate advantage to the employer,” they should legally be compensated (at least) minimum wage. In other words, if a student adds value where they’re employed, they should be paid accordingly.
However, determining the value on an intern’s work can be a bit difficult. Need a good place to start? Analyze the standard compensation rates for your industry as well as the basic skills needed to add value to most businesses. Unfortunately, the latter aren’t as easy to determine.
To determine the value a student can add to your business, start by bringing more transparency to the discussions with the student. Audit their knowledge, skills, and experience relative to your industry and business’s expectations. If it makes sense and the student can add significant value to your organization, you should consider paying them for their work.
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