Coffee Talk: Steps to a Successful Internship Program

Good morning, everyone, and thank you for joining us for today's Ramon Coffee Talk. I'm Christine Whitnaben, Senior Human Capital Business Advisor at Ramon, and I'm thrilled to welcome you to this insightful session. Today we have the pleasure of hearing from 3 exceptional professionals who will help elevate your internship program. Whether you're looking to develop a new program or enhance your existing one, our speakers will share valuable insights on best practices legal essentials, and effective ways to measure your program success. Joining us today is David Mahoney, employment law partner at Ramone, along with our talented human capital business advisors, Rita DeCefalo and Alyssa Murphy. I encourage you today to engage with us throughout the session, and if you have questions, please use the Q&A portal and we will address each one at the end. If I can't get to all your questions and queries today, don't worry, we'll follow up with an email after the presentation. But before we dive into our program today, please note that today's discussion does not constitute legal advice and does not create an attorney-client relationship. Also remember that past outcomes do not guarantee future results. Now I want to jump right into today's topic, and we'll start with Rita today about the program structure and planning. Hi, Rita. I just want to start with the question of what are the key elements to consider when designing an internship program?

Good morning, Christine, and good morning to our clients and friends. Whether you're on your first, second, or third cup of coffee, welcome. We have a very interesting topic this morning, and that's a very good question, Christine. I just want to preface this by saying it's such an important topic. Our young students are— and not only young students— are looking for a viable place to work. They're looking for us. We are looking for them. So how do we get this started? It's a very important issue here on Long Island and across the nation. I think that companies have to first really give this a top priority and think of what kind of a program that they want to initiate in their company. Do they want it to be a paid internship program or do they want it to be an unpaid, which is most likely more for an educational advantage for the employee, for the student. And David is going to get into the legal aspects of that. In a few minutes with regard to what you need to watch as far as being paying an intern and not paying an intern. So if you're deciding that you want to put an intern on payroll, that's exactly what you're doing. They are considered an employee and they go on the payroll. But the one thing that you also need to decide is, do you need a part-time? Do you need a full-time? What, what kind of timing is necessary? Necessary for the student, for the company, actually. What, what are the needs of the company? What is exactly what the company needs? The timing, the projects, the timeline, the fulfilling of the projects. This individual can fill in a niche for a very cost-effective issue that maybe a full-time employee cannot. The other thing you need to understand and figure out is do you want a full-time employee? I'm sorry, I keep using employee, a full-time intern that either is working for the summer. Do you have only summer projects? Or I have clients that have hired interns for an entire year, which means that they can work full-time in the summer again, depending on the departmental load and the projects. And then during breaks, they can be working around the breaks. And then during the year, around their schedule. And if you're going to do full-time, you're really thinking about interns from local colleges, of which we have so many wonderful institutions locally here and locally anywhere across the country. And that you would consider if you were doing a full-time and year-round employee intern for projects that you need on a regular basis. So that would be another consideration that you, that you would have to take into account. The other consideration is, do I want a high school student? Maybe there's somebody in high school that could fill in for some of the projects and give them a wonderful experience of what either manufacturing is all about, computer technology, all of the different disciplines that we have out there. And I looked at our guest list. There are many, and there are interns out there that are looking for you. Whether they be for computers or industry or any kind of electronics, electronics. We have, we have trade schools that also be very happy to interact with you. And so if you are doing that, that's what I recommend, that the company get together and understand what the projects are, what the needs are. And let's not forget, you can get the high school, you can get college, and there are retirees with with an awful lot of information that they want to impart and get back into the workplace. That's also another thought that our employees, that our clients can think about when thinking about an internship program. So, Christine, there's a whole lot to think about before you say, I think I'll get an intern. Make it profitable for the company.

Thank you, Rita. No, I understand what you're saying. You know, the design of the internship is important. The goals of the internship program, aligning them with with the goals of the entity as well. And to get that started, when, when we think about starting that internship program, we want to make sure, like you mentioned, the recruiting processes are aligned as well, reaching out to those high schools, reaching out to the colleges. So thank you for all that. I want to now move over to David to explore some of the legal considerations in more detail. David, I want to start with what are the main legal differences between paid and unpaid internships, and how can organizations ensure that they're in compliance compliance with the wage and hour laws. David, you're on mute.

Morning. So when we talk about the difference between paid and unpaid interns, we should really start— let's take one step back to what Rita was talking about earlier. What are the goals of the internship program? If the company's goal is to provide exposure to what they do to the next generation of a workforce and provide opportunities to students that may be involved in educational programs that would eventually lead them to be candidates for employment, then those are appropriate situations for there to be an unpaid internship program. Unpaid internship programs should really only be developed in conjunction with an educational institution, trying to make sure that the opportunities and the experiences that are being offered to the unpaid interns are both in line with and in furtherance of their educational journey. Unpaid interns should be treated significantly different than paid interns. Paid interns are employees. It's a very important concept that everybody should just wrap their heads around. If you have a paid intern, that is an employee of yours and you may have different goals for those employees. You may have different expectations of those employees, but they must be treated like employees. They must be onboarded like employees. They must be paid like employees. In order to ensure that you are in compliance with federal and state labor laws. Unpaid interns, on the other hand, are not employees, and they shouldn't be treated like employees. When you are recruiting unpaid interns, there has to be a very clear communication that there is no expectation of compensation, that their training will be very— will be similar to an educational environment, generally tied to an educational program for credit. The duration of unpaid internships should always be set beforehand. There should not be an open-ended unpaid internship, whether it's for a week, a month, a semester. There should always be a closed-ended timeframe for, for that program. The experience that the employee, that the unpaid intern receives during the program should be primarily for their benefit. An unpaid internship is really designed to help the education of the intern and not to provide a tangible benefit to the company that runs the program. In a sense, companies that run unpaid internships are giving something back in the hope that they create interest in a next generation of a potential workforce. However, it's also important to remember that unpaid internships should not be given any reason to believe that they have an expectation that that unpaid internship will lead to employment at the end of the day. We just really want to maintain focus on education and ensuring that the benefits of that unpaid internship lie almost solely, solely if not, or primarily if not solely with the intern themselves.

Thank you, David. Yeah, it's clearly that an internship program can develop a nice candidate pool for future use of the organization. I wanted to see if you can explore with us some of the examples that where companies may unintentionally violate labor laws in their internship programs. What should they be looking out for?

It happens all the time, especially in the most positive situations. I think that it's most likely to happen when a company sets up a good faith unpaid internship program and their unpaid intern looks like they have the potential to be a star, somebody that, that the company is really excited about, someone who shows a lot of enthusiasm. They may be very precocious in picking up the company's business. And look, everybody has a sense of excitement and in a sense of this could be a great relationship. Let's let this intern start getting his feet wet or her feet wet and start to perform some of the functions that they may if they were an employee of the company. And once that happens, once the, once the intern starts to perform tasks that would otherwise be performed by employees of the company and starts to perform tasks that are primarily for the benefit of the company rather than the benefit of the intern, we have now crossed that threshold. We are now in a situation where usually unwittingly the company has started to treat an unpaid intern as an employee, that they are not— that they haven't properly onboarded, that they're not properly paying and potentially creating liability down the road. How could that liability come about if everybody seems excited about the prospects of this relationship? Some of these interns don't get hired. Sometimes it's simply because there's not a need at the end of the internship. Sometimes there's unrealistic expectations on the part of the intern about what employment would look like. And you could be faced with an intern who thought they were getting a job out of an internship, were not offered that job, and then go to see an attorney about what their internship experience was like. And suddenly the company that went into this with all the best intentions is, is defending itself in court.

Now, building on that, when we talk about an unpaid intern and they're receiving the academic credit for the program that they're about to be entering with the company, what kind of documentation do you think it's best for the company to obtain from the college, from the school, from the high school, in order to help support that it is definitely for academic credit and not for money?

So I, I think that the smartest thing that that a company can do is collaborate with the educational institution on what the internship is going to look like. Preparation is your protection in this instance. We should not be thinking about on August 1st starting an internship program that's going to start on September 1st. I would typically recommend that employers that want to run unpaid internship programs look at this as a next year possibility so that you have the opportunity to reach out to local educational institutions, whether it's high schools, whether it's trade schools, whether it's colleges, whether it's BOCES, you know, whoever you plan on working with, give yourself enough time where you can reach out to them, find out what their students are studying, what those students get as an experience in your workplace and how the company can structure an internship program where opportunities and opportunities for education and to sit in on meetings to observe certain work being done, otherwise just get a feeling for what it's like to work in a specific industry or for a specific company. Make sure that that's all discussed ahead of time with the educational institution so that all parties are comfortable with the fact that these unpaid interns are not going to be treated as unpaid employees.

That's important.

Yeah, now is the time to do all the legwork now, from now until November, to speak with those colleges, speak with the different schools in the area, and make sure that your process is starting off on a good foot and you get enough candidates in and making your selection by the end of the year so that someone either could start in January or next summer. It's never too early to start the work that you need to do. So thank you. Now I want to turn over to Alyssa, who's going to share some insights on onboarding of interns. Alyssa, how do you create an effective onboarding process that sets interns up for success from actually day one?

That's a great question. So first, as both Rita and Dave had mentioned, there are differences for paid and unpaid interns, and the same is for onboarding. The onboarding process for both paid and unpaid interns should involve creating an orientation program that explains the company structure, provides training and expectations. It should define the intern's responsibilities and provide the assignments. It's also important to pair the intern with a mentor who can guide them, and Rita will discuss this in more detail shortly. Employees who may interact with the intern should also understand the program and the guidelines and be encouraged to share their expectations and experiences with the intern. Now we'll mention some differences between paid and unpaid interns. For unpaid interns, it's important to establish the internship is unpaid with no promise of employment. As Dave discussed, the Fair Labor Standards Act provides guidelines for classifying unpaid interns, and those should be followed. If the internship program is affiliated with a college for credit, ensure that the feedback and evaluations comply with the requirements of the college or university. Unpaid interns will not complete the standard new hire paperwork, such as I-9s and tax forms, as they're not an employee of the company. Now, paid interns must receive all standard new hire documents that you would share with any new hire. So that includes offer letters, handbooks, tax forms, and all other state and federal specific forms, including wage theft notices. As their employees, they must meet minimum wage and receive overtime pay. If for some reason you have a stipend, you should be aware that you must track hours and ensure you're still meeting minimum wage requirements and pay frequency for your state. Depending upon the duration and hours worked, employers should confirm if their intern is eligible for health benefits, 401(k), and paid family leave depending upon the state, as they may be able to opt out of that benefit if they don't meet the requirements. Both paid and unpaid interns should receive sexual harassment prevention training, and you should maintain accurate records throughout the program. Just to recap, have a prepared onboarding process, which includes sending a welcome package or an email. Again, this will vary depending upon if it's paid or unpaid. You should always have technology set up so your accounts are created, such as emails and other systems before the first day. The first day, have a set-up orientation program, right? Go over the company, Provide history and values, introduce them to the team, walk them around the space, have training sessions on relevant tools, softwares, and processes that they will use, and provide them a list of resources and where to go to find help. By focusing on these elements, you create an onboarding process that provides interns with the knowledge, skills, and connections they will need to succeed.

Thank you, Alyssa. It sounds like a good, a good situation to set up these interns in a real meaningful manner. And when we talk about meaningful. I also want to talk about meaningful work. Can you explore some of the advice that you have that someone is getting that meaningful work and not just that straightforward administrative work?

Yes. So ensuring interns receive meaningful work involves planning and engagement. There's nothing worse than having a group of interns with nothing to work on. The tasks and experience will vary depending upon if the internship is paid or unpaid, but one key insight is to ensure you're constantly communicating with the intern. Paid or unpaid, set goals, establish objectives with clear expectations. Discuss the intern's specific role and responsibilities. A paid internship should have daily assignments, outlined projects, including timelines and deliverables. For unpaid interns, the company must ensure they're actively engaging with shadowing and educational events. This could include rotating them through departments to get the big picture, you know, meeting with senior leadership, sitting in on meetings, participating in trainings, workshops, and conferences alongside the rest of your staff, and spending time with managers to ask questions. It's really important to keep lines of communication open, monitor and discuss your workplace culture, and get feedback from both the staff and the intern. By implementing these approaches, you can create an environment that provides meaningful work and develop your interns.

Thank you very much. Now, with all that said, I want to get back to Rita and build on the mentorship. When we look at the mentorship and the role of the mentor, Rita, explain to us what are some of the successful tips that we can institute as organizations in a program alongside of a mentor?

Thank you, Christine. Well, everything that Alyssa just outlined With regard to setting goals and objectives and giving the intern the best foot forward on their first day, um, I think I try to remember each time what it was like, and it's been a while for me, what the first day of work was. If we can try to remember that and wish that we had somebody to guide us through that first day— I don't think I had one, but I think it's very important when you start to think about an internship, to get your company involved in a point where they know that they need to hover over and take care of these young people who are coming into the company. And that starts with— and I'll get to the mentorship, but you need the feedback and you need the support of the top of the company first. Everybody in the company needs to be on board with the fact that you're doing this internship. And we've talked about that. Once you get everyone on board, have departmental meetings, set up goals and objectives, set up projects. Now we have a meaningful program where we know what we want to accomplish, and we're ready to give these projects to the intern. Where does the intern look or go to with questions? This is very, very important and will determine the success or failure of an intern. So while you're I'm talking at the top and having departmental meetings, and some of us don't have departments. Some of us have small companies. It doesn't matter. Just get the feedback and the buy-in from everyone who's supervising a department or a project that someone in that company will be in charge of instructing and guiding the intern, and that is the mentor. And that starts from day one, where to hang your coat, where to do go to the men's room, the ladies' room, where to get a cup of coffee. And then more importantly, these are the projects that we expect you to have. And the most important thing is that once you assign a mentor, a person that's a buddy to this intern, that mentor will be communicating. And I like to think on a daily basis. If you can't afford to do that, on a weekly basis. but open communication with one person or maybe two, depending on what you have available, will give this intern an opportunity to ask questions. And important enough, Christine, is to give feedback. The intern needs good, bad, and ugly feedback. It is the only way we grow is when we know what we've done right and how we can make things better. A mentor is the most important and critical part. So either you communicate feedback via a review, via verbally, whatever. The intern needs to know what they're doing right and what they're doing wrong. And I always suggest and tell the mentor, mistakes will be made. We're not looking to reprimand, but we're looking to coach and counsel the intern. That is the way that they will learn. So that, that is my suggestion, Christine. I'm thinking that once the company decides on all of the avenues, the goals, the objectives, that the mentor take charge and be a buddy to this intern. And also, if the intern is not working out, and believe it or not, that happens, there is a process to discipline, to give some kind of performance review, and maybe it's not going to work out. That's what the intern needs to know as well. It's a learning process.

Thank you, Rita. Now, as we near the conclusion of our program, I think it's fitting now to really discuss the process of exiting interns from the organization. I'm going to hand it back to David for this part of the segment, and particularly, Dave, how does the at-will employment apply to interns, and what legal considerations should organizations take when terminating an internship program?

So it, as we discussed earlier, the best set up internship programs have a, are not open-ended and they have a natural conclusion. So as far as at-will employment is concerned, when you're discussing your paid interns, obviously employers can terminate employees for any reason or no reason whatsoever other than, you know, with the exception of illegal reasons. But having a clearly communicated end date for an internship program is incredibly valuable in making sure that the conclusion of the program goes smoothly. We never want interns to be caught off guard that, that the internship's coming to a close. So as long as we know from the very beginning, hey, the last Friday in August is going to be your last, your last day of, of this program, then everybody can go through the, through the process and through the program with that understanding, with those expectations. Uh, when we, when we offboard an intern, whether it's a paid intern or an unpaid intern, we want to complete an exit interview, and we want to have the intern fill out an intern survey. We want the feedback from the interns as to how they believe their experience was throughout the program. Did they get anything out of it? Did they, did they get out of it what they expected to get out of it? You know, was— did they feel like their time was well spent? Did they feel like that it advanced their educational experience if they are in fact unpaid interns? And if they're paid interns, was what they were doing during the internship something that they believe is going to help them either decide whether they want a career in that line of work or whether it helped them decide whether or not the company is a place that they may want to apply at some point. There should be leadership team input on intern performance. Especially with paid internships, so that the intern gets some feedback as to how they did. That's slightly less important when we're talking about the unpaid internships because there shouldn't be many expectations out of an unpaid intern other than active participation and a commitment to get as much out of that experience as they can. When paid interns conclude their internship, they are entitled to file for unemployment, and their benefit eligibility would be determined by the state. This is one of those instances where it's important to remember that these are employees, and even if there was only an expectation for a set period of time of employment, that employment is concluding and they will become eligible for unemployment benefits. Further to that end, every time we offboard a paid intern, we want to give them all the separation documents that we would normally give to an employee when they separate from service. And you should really check state regulations and to see what exactly is required of you when you go through with that process. And if you have questions, about what needs to be given to interns as far as paperwork at the end of their internships, certainly reach out to us and we can provide you with more focused guidance on that point.

David, can you also talk about not only the end of the internship, but say if there's a situation that's going on, this intern's not working out and it's the middle of the summer, it's a summer internship, and we want to terminate that internship in the middle, whether it's for academic credit or whether it's paid. What are some of the legal risks and what can companies do to protect themselves when they're ending an internship early?

So certainly with respect to paid interns, we're going to treat either performance or discipline issues the same way that we would with any other employee. You know, even, even knowing that there's going to be an outside date to the end of this relationship, the company may feel that the intern is either disruptive isn't fully engaged, that their performance does not indicate either an ability to improve or a willingness to do what is necessary to improve, we may just want to get rid of this person before the end of the internship program. Companies are, are best protected if they engage in some sort of performance improvement plan or progressive discipline. And Just as we would tell you with any employee, make sure that you document what you're doing, what the conversations are that you're having with the employee about the concerns that you have. Make sure that that documentation outlines what the goals are in any performance improvement plan or what the expectations are about a timeframe for improvement. And then ultimately, if it just does not seem like it's a good fit and the person is either disruptive or you know, no longer someone that you think is a good candidate even for that internship, you know, the company always reserves the right to let them go before the end of the program. When we're talking about unpaid interns, we'd caution against letting go an unpaid intern just because you've come to the conclusion that you're not going to want to eventually hire them. Unpaid interns should be given the opportunity to complete their experience unless they really are disruptive or completely disengaged with that process. Keep in mind that you don't really have any expectations about what you are going to get out of the unpaid intern. This is really just about what you can offer the unpaid intern. So even, even an unpaid intern that, that seems mediocre at best, you know, we, we would typically recommend that you allow those allows individuals to complete their program, feel free to give feedback both to the intern themselves as well as to, to the educational institution that, that you found that individual through. But as far as if you do decide that you're going to let them go, they do not have the same legal recourse that paid interns do because they're not employees. So I would caution against dismissing unpaid interns unless they're really disruptive to the overall atmosphere of your business or your program. But you always retain the right to offboard someone who really is disruptive, really is disengaged, or otherwise is a candidate that you just— you can no longer tolerate having in your workplace.

Thank you, David. Before we end up with today's wrap-up, today's program, I just want to address one of the questions that we are receiving in the chat. I want to have you share with us, and this question is, is there a real-world example that you could share with us where there was legal issues that the company was faced with and how they overcame them?

I mean, I've had to defend companies against unpaid wage claims because they hire— because they brought someone on as an unpaid intern. The person was doing a really good job and they started to give the person some responsibility. And, you know, we crossed that bridge. It went into what is really just an employer-employee relationship, and they continued to to treat the person as an unpaid intern. And it can be a very expensive lesson to learn because these internship programs, you know, especially if you allow the interns to spend a lot of time at the company on a daily basis, one of the, one of the ways that I'd recommend avoiding the, the possibility of extended liability is to keep a very tight schedule with these with these interns. Do you really need them there 8 hours a day? Or, you know, is a few hours a day or a few days a week something where they can get everything that they need to out of that experience without, without putting the company at risk? Because in the case that's just popping to mind, it was a manufacturing company. They had a college kid that was a real go-getter, and they saw this person as, as potentially in a great addition to their team. So they, they started, they started integrating and they started to get him to work on things that, that they would work on on a daily basis. And again, with all the best intentions. But then when the, when the intern did not get the job offer that he expected to get, he went home. I don't know whether he complained to his parents or went straight to, to an attorney. But the next thing we knew, we were embroiled in a federal unpaid wage litigation where the company was not in the best position to defend itself because it had, in fact, transitioned that kid over from being an unpaid intern to an employee without actually taking the formal step of onboarding and paying him correctly.

Well, thank you very much for that, David, and thank you, Rita and Alyssa, for generously sharing your insights today as well. I want to thank the audience for attending today. Each of you will receive a link to today's presentation by email, along with the email addresses of today's speakers as well. The link will also be posted to our website at RamonLaw.com. Our next Coffee Talk is scheduled for November, and we're eagerly waiting to join you once again for our next program. Thank you all for taking time today with us.