Everything You Need to Know About Paying Interns

Internships have long been viewed as a rite of passage for college students and young professionals entering the workforce, offering invaluable opportunities for hands-on experience, networking, and skill-building—and providing a clear pathway for breaking into a particular profession. 

Today, the debate about whether interns should be paid for their contributions rages on, with many employers arguing that the experience gained is payment enough, while others believe that all work deserves fair compensation. 

Interestingly, the split is about fifty-fifty, with 47% of interns still going unpaid.

But, paying interns is not just a lofty, ethical concept; there are tangible, practical reasons for companies to pay their interns—reasons that drive key business metrics and positively affect the bottom line. 

Keep reading to find out why it’s in every employer’s best interest to compensate interns for their work. 

Brand Reputation: Fair Labor Practices and Socioeconomic Inclusion 

At its core, work is an exchange of time and skill for monetary compensation. Unpaid internships disrupt this balance, often exploiting young talent under the guise of “gaining more experience.” 

This practice becomes especially concerning when interns are doing work that would otherwise require a paid employee. Not compensating them for their contributions then is, in essence, a violation of fair labor practices during a time when fair labor practices are becoming a major part of the national conversation. 

In fact, just recently, the federal government rolled out its final regulations to implement ban-the-box laws at federal agencies and government contractors, and, last year, the Biden-Harris administration became the first administration to pay White House interns. 

As such, in order to maintain a positive brand perception and remain competitive, it’s critical for employers to engage in fair labor practices and pay interns. 

Not to mention the fact that unpaid internships also disproportionately affect individuals from lower socioeconomic backgrounds who cannot afford to work for free—creating a barrier to entry for diverse talent that perpetuates a cycle of inequality. 

Paying interns ensures that job opportunities are accessible to all, regardless of financial status, during a time when diversity, equity, and inclusion matter a lot. 

Today, diverse companies see 2.5 times higher cash flow per employee, higher revenues, increased employee engagement, and better retention numbers––and an overall better brand perception from customers and talent. 

Productivity and Work Quality 

Compensated for their time and effort, paid interns are more likely to be committed and motivated, resulting in higher quality work that drives key business metrics. 

Plus, when an organization compensates its interns, it sends a message that intern contributions are valuable, thereby boosting morale and productivity.

Further, paid internships allow interns to be more fully present and focused on the task at hand, since they don’t have to seek out paid work on the side to make a living during that time––creating another positive productivity feedback loop for employers that pay up.

Attracting and Retaining Talent

Internships have long been used as a strategic recruiting tool, allowing companies to develop and keep top talent in their field. 

Interns-turned-employees result in lower-cost hires for businesses since they require less sourcing, less job training, and are already onboarded to company culture. That means it’s in every employer’s best interest to do all they can to retain interns for full-time employment.

What is the best thing they can do to deliver on that goal? Pay them. 

Paid interns are 32% more likely to stick with the company and accept a permanent job offer, making paid internship programs cost-effective for employers to attract, recruit, and train future employees. 

Plus, in today’s tight labor market, offering paid internships makes an organization more attractive to high-caliber candidates, giving companies a competitive edge in recruiting the best and brightest talent.

Compliance On Paying Interns

Legal protections for unpaid interns are on the rise. Although the federal government doesn’t have any strict requirements for unpaid internships, many state governments offer more specific standards. 

In some jurisdictions, labor laws require that interns be paid if they contribute in certain ways that benefit the organization or mandate that companies provide a certain level of value (in the form of training) to interns if they are unpaid. Failure to comply can result in major legal repercussions, including hefty fines and reputational damage. 

States like California and New York are leading the way with this kind of legislation, and more jurisdictions are expected to follow suit. To prepare for a future with stricter legal protections for interns, employers should start to incorporate fairer intern pay practices today.