Get out of the School Daze – Sharpen Your Volunteer Student Intern IQ Signs on area roadways warn, “School is in Session! Watch for Students!” I could say the same to my clients. With the school year under way, many employers welcome volunteer students into their offices or shops. They’re called volunteers, clerks, interns, externs. Whatever they’re called, don’t let their flip-flops fool you. They may be casual, but you shouldn’t be. Whether your student underling is working for credit, experience or both, if you’re not careful, unpaid student workers could land you in the Commissioner of Labor and Industry’s detention center. Gulp.

Follow a few key rules and using students as volunteer staff is both a good deed and a good deal that will not get you sent to the principal’s office. But get it right, because Maryland’s Wage Payment and Collection Act is more than just a schoolyard bully. It packs a punch of treble damages and attorneys’ fees.

Take the Student Intern IQ Test:

Q: A hard working student could help finish that customer project – and pass on the savings to your balance sheet, right?

A: Wrong. Maryland law requires that an employer pay wages if the employer gains “an immediate advantage” from a worker’s performance. What’s an “immediate advantage?” A classic example is billing the customer. If you charge your customer for work done by a volunteer worker, that’s an immediate advantage in your pocket. In order to qualify as a volunteer worker, the work performed by your student intern must primarily be an educational experience.

Q: That young and eager college student is running circles around your old, complacent staff. What a great opportunity – cut the fat and save the wages!

A: Try again. This is a double whammy. Not only is this a potential violation of Maryland’s wage and hour laws, you may be liable for age discrimination. Displacement of a regular employee with a volunteer is a key factor the Commissioner and the courts look at to determine whether a volunteer is a legitimate volunteer – that is, a worker an employer is entitled not to pay wages. And if you terminate an employee forty years or older because the youngin’ can do the job for free, you’re asking for an age discrimination lawsuit. Courts tend to disfavor the explanation that the young replacement is just as good and cheaper (or free, as the case may be) as a defense to a charge of age discrimination. It’s generally accepted that employers get what they pay for, so a justification that you canned the old bird for the young chick to save money may not fly.

Q: That design student is really good with computers and is happy to help. Instead of assigning her to shadow your senior designer, why not use her to fix that problem you’ve been having with your system, right? Those IT vendors are a bloody fortune!

A: Forget it. The Commissioner and the courts look closely at the tasks assigned to “volunteers.” The work performed by your volunteer student should be a logical extension of the student’s course of study and should benefit the student by providing valuable professional or trade experience. Using student workers to clean out the junkyard that no one else wants to work on will only pass muster if your intern is majoring in Junkyard Dog.

Q: When you interviewed the student, you said you would pay him a stipend at the end of the internship, depending on what was left in the budget. You’re only trying to look out for him and be fair, and you didn’t tell him how much, right?

A: Woops! This is a toughie. In order to qualify as a volunteer (and in order to entitle you to avoid paying wages without running afoul of Maryland’s wage and hour laws), you should make it crystal clear to your intern that he is not entitled to any pay for the time spent in the internship. Ideally, put this in writing and provide it to the intern on his first day or before he begins the internship. If, at the close of the internship, you give him a gratuitous stipend, that’s likely fine under Maryland’s wage and hour laws, so long as no promises or assurances have been made that any wages or pay would come of his internship. But don’t ignore potential tax consequences of the payment. It’s likely income and you can wind up in trouble if you don’t report it. Get your CPA involved and do it right.

Q: A month into the internship, to encourage a hard-working volunteer, you pat her on the back and say, “Keep it up, kiddo. With performance like this, I may have a full-time job for you.” Hey, she’s doing great – why shouldn’t you encourage her with the possibility of a job, right?

A: Ix-nay on the Ob-jay. Promising future employment – even conditionally – is a sure-fire way to disqualify the intern as a volunteer. The Commissioner and the courts indicate that holding out a promise of future employment is a way of sapping work for free while you can. It’s not allowed. This doesn’t mean you can’t offer a job to your intern after the internship has ended, but the internship should not be built on a promise of future employment.

So, how’d did you do on this test? Did you ever guess that such a benign looking arrangement could have such consequences? Welcoming a student volunteer into the workplace is supposed to benefit the student, not to offer a frugal employer the chance to get free work from a willing neophyte. You can avoid these issues entirely by offering student-level workers minimum wage pay. Another upside to this alternative is that unpaid workers are not typically covered under workers’ compensation insurance, so an injured unpaid intern could look to you for medical bills and damages (and sue you too). Putting your intern on the payroll at minimum wage shores up this potential liability. And, chances are, overtime won’t be a problem, because student interns aren’t likely to work enough hours.

Labels: intern, Student, volunteer

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