view looking down at a table with people on laptops & drinking coffeeSummer may be over, but if your office is like mine, interns are a welcome presence year-round. Hiring interns can be a mutually beneficial experience for both the employer and the intern. Interns develop hands-on experience in a field they are interested in pursuing, and a company gets a fresh take on things from the minds of a younger generation. As you get ready to welcome another round of interns this fall, make sure you understand how to pay them.

Before bringing interns on board, companies must determine whether the New York State minimum wage and overtime rules apply to their interns. In general, an intern is exempt from the New York State Minimum Wage Act and Orders (meaning, the intern does not need to be paid minimum wage, if anything) only if the intern and the business are not in an employment relationship. Note, you and your intern are in an employment relationship unless all eleven of the following criteria apply. (This test applies only to the state Minimum Wage Act and Orders, not unemployment insurance or workers’ compensation.)

  1. The training you provide to your intern is close to the training an educational program would provide (for example, the intern’s school oversees the program and provides school credit).
  2. The training your business provides primarily benefits the intern.
  3. The intern works under close supervision and does not displace regular employees.
  4. Your intern’s activities do not immediately or solely provide an advantage to you or your business.
  5. The interns are not necessarily entitled to a job after the internship ends and are free to take jobs elsewhere.
  6. The interns are notified in writing that they will not receive wages and are not considered employees for minimum wage purposes.
  7. Training must be directly supervised by individuals who are knowledgeable and experienced in that field.
  8. Interns do not receive employment benefits (health, dental, pension, retirement, etc.).
  9. The training you provide is not tailor-made for your business; it is more general and can be used in similar businesses.
  10. The screening process for interns is not the same process your company uses when hiring full-time employees.
  11. Ads or posts for the training program discuss education and hands-on experience rather than employment opportunities. However, you can state that your company is interested in hiring an intern for full-time employment once full training is completed.

Do all the above criteria describe the relationship with your intern? If not, the intern must be paid pursuant to the state minimum wage and overtime laws. Please contact us with any questions or to discuss your unique situation. Here’s to a productive experience for both of you!