Ask an HR Pro: Do You Have to Pay Interns?

Hiring interns helps you fill short-term staffing needs, gain fresh perspectives, and even build a pipeline of future full-time employees. For students, recent graduates, and career changers, internships provide hands-on experience that boosts their resumes and career prospects.

However, navigating the logistics of internships – specifically, whether or not you’re legally required or ethically inclined to pay your interns – can be complex.

To help answer the big question, “​Do you have to pay interns?”​, we turned to Chrisanne Bowden, Principal HR Business Partner at iHire, for her expert advice.

Do You Have to Pay Interns?

“Whether you have to pay interns or not depends on your local labor laws and the type of internship program you’re offering,” Bowden began.

The legal parameters are fairly clear, thanks to the Department of Labor’s (DOL) guidelines on internships. The DOL uses a “primary beneficiary test” with seven distinct factors to evaluate whether an intern qualifies for minimum wage and overtime pay under the Fair Labor Standards Act (FLSA).

“If the intern is deemed the ‘primary beneficiary,’ meaning they gain more educational benefits than the company from the arrangement, then the internship may qualify as unpaid,” Bowden continued.

This typically applies to internships where interns receive college credit or structured training that mimics an educational experience, and where they are not replacing regular employees or providing immediate benefit to the employer.

However, for-profit businesses hiring interns should tread carefully – even the DOL describes the “primary beneficiary test” as a “flexible test” with each case being unique.

“These guidelines and parameters can be nuanced, and a mistake could result in legal consequences. If you’re unsure, consult an HR expert or labor attorney to confirm you’re in compliance,” Bowden advised.

Why Should You Pay Interns?

Let’s say you determine your interns are not entitled to pay. Should you still pay them anyway?

“Even if you don’t legally have to do so, paying interns is the ethical and strategic thing to do,” said Bowden. “It strengthens your employer brand and enables you to diversify your talent pool now and into the future.”

Paying Interns Attracts Top Talent & Diverse Candidates

By paying your interns, you can attract candidates who could contribute real value to your business with strong academic achievements, relevant skills, and enthusiasm. Furthermore, many students cannot afford to work for free.

“Unpaid internships tend to limit opportunities to those who are able to work without pay,” Bowden continued. “By paying your interns, you create a more equitable and diverse workplace.”

Paying Interns Enhances Your Employer Brand

When it comes to hiring, a company’s reputation and employer brand matter immensely.

“Paid internships show that a company values its people on all organizational levels,” said Bowden. “They send a positive message to potential interns, current and future employees, and your industry at large about your culture and values.”

Paying Interns Builds Your Talent Pipeline

Interns could also become full-time employees and fill skills gaps. By compensating them from the beginning, you achieve higher employee satisfaction and loyalty if and when you eventually hire them.

“Think of paying your interns as an investment,” Bowden explained. “You’re not just compensating them for their work. You’re also investing in their potential to become a key player in your organization who can quickly fill an open position.”

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How Much Should You Pay an Intern?

Once you’ve decided on offering a paid internship, you need to determine how much to pay.

Benchmark Against Local and Industry Standards

“How much you pay your interns varies based on your industry, your location, and the type of work they’re doing,” noted Bowden. “And, as with other positions, you want to ensure you’re offering a competitive wage.”

iHire’s Salary Research Tool and the Bureau of Labor Statistics are great resources for this data, and per NACE, the average hourly wage for bachelor’s-level interns in 2024 was $23.04.

“Many colleges and universities also offer recommended pay rates for internships based on local market data,” Bowden added.

Factor in Job Complexity

“Also consider the type of work your intern will be doing. The more technically demanding or specialized the work, the higher the pay should be,” Bowden clarified.

For example, interns fulfilling basic administrative or customer service duties might earn the hourly minimum wage, while those performing complex technical tasks could earn more.

Offer Additional Benefits & Perks

If your budget is limited for paying interns above minimum wage, you can supplement compensation with non-monetary perks that they’ll appreciate.

“Offer valuable benefits like free lunches, gym memberships, reimbursement for parking, flexible scheduling, remote or hybrid work options, or access to professional development and training,” Bowden suggested. “These unique perks may help your internship stand out in a competitive market.”

Paid Interns vs. Unpaid Interns

Hiring interns can bring incredible value to your company, but carefully consider your decision to pay them or not.

“Ultimately, paying interns demonstrates your company’s dedication to empowering the workforce of the future,” said Bowden. “And in the long run, you’ll likely see your investment pay off in the form of stronger relationships with top-performing employees.”

If you’d like to learn more about best practices for hiring and get personalized guidance on paying interns, reach out to iHire’s HR professionals for a free consultation. And when you’re ready, post your internship opportunities on iHireAdvancedPractitioners to reach the right candidates!