Nina L. Kaufman, Esq.
Nina L. Kaufman, Esq., owner of Ask The Business Lawyer, is an award-winning business attorney, speaker, and Entrepreneur Magazine online contributor. She saves consulting and professional services companies time, money, and aggravation by serving as their outsourced legal counsel.
Unpaid internships used to be all about “the experience”–an opportunity for young students to break into a new field, to gain contacts, to explore new career possibilities. But with the current administration’s increased focus on enforcing labor law violations, small businesses could well fall into the enforcement net.
While this Daily Dose post covered summer internships, it also applies when you’re looking to fill the spot without filling the person’s wallet–in a word (or two), without pay.
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Thanks for writing and sharing this, Nina. Another issue that often creates problems for businesses that hire interns is workers’ compensation (“WC”). If your intern is injured while performing duties in furtherance of your business, you will probably be liable for wage replacement and medical benefits related to the injury. Often, businesses that hire interns are start-up companies that believe they do not have the funds to hire employees to do the same work. So, they often do not have WC insurance. In New York, this may mean they will have to pay the costs of the WC claim and substantial penalties to the State Workers’ Compensation Board. Suddenly, every penny they think they saved in getting someone to work for free has been “eaten up” by one claim and they might have a deficit beyond imagination. It’s not worth the risk.
This is a classic case of “If it seems to be too good to be true, it probably is.” Thanks again for reminding your readers and for caring so much about small business.
Great point, Nance–thanks so much for bringing that up. If I remember correctly, business owners can be held personally libale for Workers’ Comp violations … and possibly subject to criminal penalties. Am I right? If so, your business entity won’t shield you from that personal liability.