The risk management implications of hiring summer interns

By Higginbotham on May 25 , 2016

Intern Liability

With another summer season just around the corner, you may be considering hiring interns for your business. And why not? It’s a chance to give back to your community by providing someone with valuable work experience, while getting the summertime help you need. It can be a win-win for everyone.

But before you go down that road, you need to be aware of the risks. Internships offer some nice perks, but they also come with some pitfalls. For example, hiring an intern immediately increases your risk of an employment practices lawsuit, and these lawsuits are on the rise. If an internship goes bad, you could find yourself being sued over compensation, hours worked or some other allegation that you violated an intern’s rights.

Before you consider hiring an intern, understand the legalities.

Make sure you understand your state wage and hour laws, as well as federal and state child labor laws. And if you plan to offer an unpaid internship, be aware that you’re subject to the U.S. Department of Labor’s Fair Labor Standards Act (FLSA). Running afoul of these laws can cost you plenty in citations, fines, lawsuits and damage to your reputation.

To make sure your internships go smoothly for everyone, follow these risk management best practices.

  • Welcome them to the team. Provide your interns with a formal orientation to introduce them to the company and familiarize them with the work environment and staff.
  • Give them access to information. Whether you provide a written internship handbook or a website, your interns need to know where they can find information about your company and policies if they ever have questions or issues. Any intern benefits you provide such as paid time off or sick days should also be in writing.
  • Provide professional-level assignments. Don’t just give your interns menial tasks to keep them busy. They need a structured program and guidance, and you’ll both get more out of the relationship if they have meaningful work to do.
  • Make them feel like part of the team. Include your interns in company activities and traditions such office sports teams, group lunches or company parties, and encourage their participation.
  • Give them feedback. Provide periodic feedback through written or in-person evaluations so you can assess the program and the interns’ performance.
  • Conduct an exit interview to get your interns’ feedback on the program and their experience with your company. This can provide valuable insight for improving your program for future interns.
  • Stay connected. When the internship is over, offer to stay in contact through email or social media to see how their career is progressing. You can also be a valuable resource for your interns by being an ongoing educational resource for them and providing employment references.
  • Consider special insurance coverage. The last thing you need is to get hit with a lawsuit and find out you’re not covered. If you have interns, you should consider employment practices liability (EPL) insurance to help mitigate the risks.

Summer internships can be a great win-win for businesses and interns. Just make sure you have a well-organized program with specific goals, know the applicable laws and protect yourself with the right insurance coverage. By following these best practices, you can ensure that your internship program will be rewarding for everyone.

For more information about protecting yourself from today’s employment practices liability risks, contact your Higginbotham commercial insurance agent.


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Tags: Risk Management


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