Can we? As a technology start-up company with a start-up company's bootstrapped budget, can we ask an intern to work for us for free? After all, they're just doing it for the experience, right? They'll get to add working at our cool start-up to their résumés, no prob. That's great for them – and legal, too, right?
Here is the U.S. Department of Labor's fact sheet on internships (.pdf), and the tests that apply to determine whether wage and hour laws apply (i.e., whether you have to pay them).
The main criterion that typically provides the biggest hurdle for start-ups is number 4: "The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded."
So, for interns working at start-ups, it is typically the case that the start-up does actually expect some advantage from their work, and the better route is to pay them minimum wage, either as an employee or, if possible, as a consultant.
Yes, from an intern I expect the advantage of their cutting-edge, state-of-the-art knowledge from a top university to be at work for the advantage of my company.
The U.S. Department of Labor also offers a guide to Minimum Wage Laws in the States. I'll be familiarizing myself with that. Thanks, Ken.
Ken Maready will do a talk on the "Basics of University Start-Ups" on Tuesday, April 26, 2011 at the Virginia Tech Corporate Research Center, in Blacksburg, Virginia, USA. Please click here for more information.