Student Affairs

An energetic intern works the summer away at your independent agency. They help with social media, revamp your website and sit in on agency strategy sessions. By fall, they have received valuable career training and mentoring. And you receive…a lawsuit?

It’s not as far-fetched as it sounds. According to ProPublica, more than 20 internship-related lawsuits were filed in 2013 alone. While employing interns is a standard business practice today, companies that do not adequately assess their risk exposure stand to face both reputational and financial losses.

As your agency—and your commercial clients—begins the search for a summer intern, Roy Tyson, vice president at Chubb Specialty Insurance, recommends:

• Reviewing the Fair Labor Standards Act (FLSA). Seek legal counsel and make sure your internship programs comply with the FLSA. The Department of Labor outlines specific criteria required for a program to qualify for unpaid status. While businesses may believe they have met all the necessary guidelines, they may be wrong.
  
• Formalizing your internship program. Use legal counsel to establish clear documentation regarding what your internship program provides, including a detailed description of the internship; the training experience the interns will receive and acknowledgement that the program complies with labor laws. Upon hiring, provide all interns with a copy of an employee handbook explaining your harassment and anti-discrimination policies to help mitigate the risk of a liability lawsuit against the company.
  
• Assessing academic credit. Many unpaid internships provide academic credit in exchange for an intern’s work. But this is no longer enough. In the landmark “Black Swan” internship lawsuit (Glatt, et al. v. Fox Searchlight Pictures), Judge William H. Pauley III ruled that academic credit and unpaid internships are not mutually exclusive, paving the way for significant changes in the ways many organizations must compensate interns.

Katie Butler is IA editor in chief.