Hiring Summer Interns? Here's What Employers Often Overlook

It’s intern season. Summer internships give students opportunities to gain real-world experience, explore potential careers and develop professional skills. Employers, meanwhile, can introduce emerging talent to their organizations, complete meaningful projects and give managers experience training and supervising employees.

Internship programs also can support long-term recruiting efforts. According to the National Association of Colleges and Employers’ 2026 Internship and Co-op Survey, employers converted 63.1% of their 2024–25 interns into full-time hires—the highest conversion rate in five years.

But employers should not treat interns as temporary employees who can be added to the workplace without much planning. Before hiring summer interns, businesses need to consider compensation, job duties, employment paperwork, supervision and applicable child labor requirements.

Here’s what employers should know.

Why Do Businesses Hire Interns?

Internships can provide short-term support, but their value should extend beyond getting extra help during a busy season.

A well-designed internship program can help employers:

• Introduce students to their company and industry.
• Build relationships with prospective future employees.
• Evaluate potential hires in a real-world work environment.
• Complete meaningful projects that support business goals.
• Develop the coaching and supervisory skills of current employees.
• Strengthen the organization’s reputation among students and local schools.

Small businesses can offer especially valuable internship experiences. Interns may have greater access to company leaders, contribute across several areas and gain a broader understanding of how a business operates than they would in a narrowly defined role at a larger organization.

Define the Internship Before Recruiting

Before posting an internship, employers should determine what the intern will learn, what work they will perform and who will supervise them.

A clearly defined internship should include:

• Specific job duties and meaningful projects.
• Educational or professional learning objectives.
• Required skills or qualifications.
• The program’s start and end dates.
• Expected working hours.
• Whether the position is in person, remote or hybrid.
• A designated supervisor or mentor.
• A process for providing feedback and evaluating performance.

Avoid creating an internship simply to cover a regular employee’s workload or fill an ongoing staffing shortage. The experience should provide genuine learning and development for the student while supporting the organization’s goals.

Do Companies Have to Pay Interns?

Calling someone an intern does not automatically mean the position may be unpaid.

For-profit employers generally must pay interns unless the circumstances demonstrate that the intern—not the employer—is the primary beneficiary of the relationship. The U.S. Department of Labor uses a flexible seven-factor test to evaluate the economic reality of the arrangement.

Among other considerations, the test examines:

• Whether the parties understand there is no expectation of compensation.
• Whether the internship provides training similar to an educational environment.
• Whether the experience is connected to the intern’s formal education.
• Whether the internship accommodates the student’s academic commitments.
• Whether the internship lasts only as long as it provides beneficial learning.
• Whether the intern complements rather than displaces paid employees.
• Whether the parties understand the internship does not guarantee a paid job.

No single factor determines the outcome, and employers do not have to satisfy every factor. The complete circumstances of the internship must be considered.

Academic credit alone does not automatically make an unpaid internship lawful. If an intern performs productive work normally completed by employees without receiving significant training or educational benefits, the intern may qualify as an employee entitled to minimum wage and overtime.

Because classification mistakes can result in back pay and other penalties, paying the intern is generally the safer approach when there is uncertainty.

RELATED: Ask the Expert: Do We Have to Pay Our Interns? >>

4 Reasons to Pay Interns

Even when an internship may qualify as unpaid, compensating interns can be the better business decision.

1.  Paid internships reach more candidates

Students who cannot afford to work without pay may have to pass on an unpaid opportunity, regardless of their qualifications. Compensation can help employers reach a broader candidate pool.

2.  Pay demonstrates that the intern’s contributions have value

Interns may work alongside regular employees and contribute to meaningful business projects. Paying them reinforces that the organization respects their time and effort.

3.  Paid opportunities can strengthen the employer’s reputation

Students, employees, customers and community partners may respond more positively to organizations that compensate interns for their work.

4.  Pay can reduce classification risk

An employer that incorrectly treats an employee as an unpaid intern may face wage claims involving unpaid minimum wages, overtime and other penalties.

Paying an intern does not mean the employer must offer a full-time schedule. A structured part-time internship may allow a small business to create a meaningful paid opportunity while managing program costs.

Follow Employment Requirements for Paid Interns

Once an intern is classified as an employee, the term “intern” does not remove the employer’s normal wage, payroll and onboarding responsibilities.

Depending on the circumstances and applicable laws, employers may need to:

• Add the intern to payroll and withhold applicable taxes
• Complete Form I-9 and other required hiring documentation
• Record all hours worked
• Pay at least the applicable minimum wage
• Pay overtime when required
• Provide required workplace notices, policies and training
• Review workers’ compensation coverage and benefit-plan eligibility
• Establish expectations for attendance, breaks and requesting time off
• Protect confidential company, customer and employee information

Employers must complete Form I-9 when they hire someone to perform labor or services in the United States in exchange for wages or other compensation.

Employers considering international students also should confirm that the student has proper authorization for the specific employment opportunity before work begins.

Check the Rules Before Hiring Interns Under 18

High school internship programs can introduce young people to new careers, but employers must consider additional restrictions when an intern is younger than 18.

Federal child labor laws restrict the hours and types of work that 14- and 15-year-olds may perform. Employees who are 16 or 17 may generally work broader schedules under federal law, but they cannot perform occupations the Department of Labor considers hazardous.

Restrictions may apply to work involving:

• Driving
• Forklifts and other power-driven hoisting equipment
• Certain power-driven machinery
• Roofing and construction
• Excavation
• Meat-processing equipment
• Compactors and balers
• Other hazardous duties or workplaces

Employers also must check state requirements, including any rules involving work permits, proof of age, permitted schedules and required breaks. When federal and state requirements differ, the standard that provides greater protection to the young worker generally applies.

Do not assume that a job is permissible merely because it is part of an internship or school program.

Provide Structure, Supervision and Feedback

Interns should not arrive on their first day without a clear schedule, prepared supervisor or defined assignments.

An effective internship experience typically includes:

• A structured orientation.
• Clear explanations of job duties and workplace expectations.
• Introductions to relevant employees and departments.
• Training on company systems and procedures.
• A primary supervisor or mentor.
• Regular check-in meetings.
• Opportunities to ask questions and receive feedback.
• A midpoint and final evaluation.
• A conversation about the intern’s interests and possible next steps.

Supervisors also should be prepared to explain the purpose behind assignments. Giving interns context helps transform everyday work into a meaningful learning experience.

RELATED: How Onboarding Sets Interns Up for Success >>

Plan Carefully for Remote and Hybrid Internships

Remote and hybrid internships can help employers reach students outside their immediate geographic area and provide greater flexibility for participants. However, these arrangements require more intentional communication and supervision.

Employers should establish:

• Clear working hours and availability expectations.
• A reliable method for tracking time.
• Procedures for requesting help or approval.
• Regular video meetings with the intern’s supervisor.
• Access to appropriate technology and company systems.
• Cybersecurity and confidentiality requirements.
• Opportunities to interact with coworkers and other interns.
• Clearly defined projects, deadlines and performance expectations.

Remote interns should receive the same level of direction, feedback and professional development as interns working in the employer’s physical workplace.

RELATED: Three Ways to Keep Remote Workers Accountable >>

Build an Internship Program That Supports Your Future Workforce

Summer interns can bring fresh perspectives, new skills and valuable support to a business. But a successful internship program requires more than hiring a student and assigning a few summer projects.

Employers should determine whether the position must be paid, define meaningful learning objectives, complete the appropriate hiring steps, follow child labor requirements and provide consistent supervision throughout the program.

Axcet HR Solutions helps small and mid-sized businesses address intern classification, compensation, onboarding, policies and other HR considerations involved in building an effective internship program.

Learn how Axcet’s Talent Management Consulting Services can help you create an internship program that supports your immediate business needs and long-term talent goals.