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 If analysis of the circumstances reveals that an intern is actually an employee, then he or she is likely entitled to both the minimum wage and overtime compensation under the FLSA.  (Photo: Stock)

As the summer draws near, many companies are considering bringing on summer interns. Interns are students or trainees who work in an organization in order to gain work experience or satisfy educational requirements. An internship can, and hopefully will, benefit the company that uses such a program. For example, internships may provide a pool of potential new hires for the company, serve as a source of inexpensive labor, foster a positive public image, and build beneficial relationships with local communities and educational institutions. The question that always arises is: Does a company have to pay its summer interns? The short answer is: It depends on how you structure your intern program.

While state laws may vary on this subject, when it comes to the federal Fair Labor Standards Act (FLSA), in determining whether an unpaid internship passes muster, the U.S. Department of Labor (DOL) is most concerned with the purpose of the internship and who is benefiting from it. The primary issue, of course, is that, if the intern is actually an employee, he or she must be treated and paid like an employee (which would include the related requirements of tracking hours, receiving overtime, etc.)

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