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Unpaid interns teach some employers a costly lesson

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in Compensation and Benefits,Employment Law,Human Resources

by Kathryn M. Nash, Esq.

Dire economic conditions have employers thinking creatively about how to reduce labor costs. At the same time, unemployed job-seekers are desperate to gain an edge over other candidates.

For employers and job-seekers alike, unpaid internships seem like an attractive option. But internships come with risks.

Before you begin taking on interns, do a thoughtful and careful analysis to make sure state and federal law allows you to classify an individual as an unpaid intern rather than a paid employee. If an administrative agency or court determines that the unpaid intern was actually an employee, the misclassification can be very costly. That will make you liable for back pay, legal fees and penalties related to unpaid taxes, unemployment compensation insurance and workers’ compensation.

In light of the U.S. Department of Labor’s increased enforcement efforts, it is important to pay careful attention to h...(register to read more)

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