3 Things You Need to Know About the 7-Factor Internship Test


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As a career services professional, you understand how important an internship is for a student’s career development. The work experience helps them to determine what they’re truly passionate about. They also learn valuable skills that will give them an edge during their job hunt.

But you also know that not all internships are created equal.

Some internships are great opportunities. They provide hands-on experience and an insider’s look at how a business functions. Others are mostly grunt work. And more importantly, to many students, some are paid.

Until recently, the Department of Labor had a six-factor checklist to determine if an intern should be paid. Even if the internship did not meet one of those criteria, the individual deserved compensation. But, as of the first of the year, there is a new set of guidelines.

The seven-factor test is more flexible. Instead of demanding that the company receive almost no financial benefit from the intern’s work, the test serves to determine who is the “primary beneficiary.” As long as the intern is getting more out of the position than the employer, they don’t have to be paid.

So what does that mean for your students? Here are three changes they need to be aware of:

1.There’s more flexibility for organizations

Until recently, companies had to meet each of the six factors to have an internship qualify as unpaid. Now, they simply have to create an environment where the intern receives more from the situation than they do. This provides a lot more wiggle room in the types of internship they can offer.

This also opens the door for less conventional companies to start internship programs. For example, many smaller companies couldn’t offer positions to students because the work they’d be doing wouldn’t pass the six-factor test. Now, they can hire students and give them a quality and educational experience.

Encourage your students to take advantage of this. If there is a company that they’re interested in that doesn’t have an internship program, have them propose one. Encourage them to meet with the employer and explain why they want to learn from the company.

Also, help them develop a structure for the internship program that they can show to the organization. If it passes the new test and the company will not have to pay your student, they’ll be more open to providing the work experience.

2. Interns can get more valuable experiences

For a long time, paid internships were valued not only because of the paycheck but also because they provided better experience. This was because the hands-on experience the interns received was also very beneficial to the employer. It was real work.

In fact, a 2016 report from the National Association of Colleges and Employers found that paid internships were rated significantly for professional skills development. Unpaid internships were not.

Now, that can all change. Companies can offer interns more responsibilities. They can give a better understanding of how the lessons students are learning in the classroom applies to the workforce.

But that doesn’t mean students can assume they’re getting better experience. Encourage them to thoroughly research each internship. Have them ask specific questions about what they’d be doing. This way, they can determine if the unpaid position will really help them professionally.

3. It’s not law

It’s important for students to remember that the DOL guidelines are not laws. In the end, judges are the ones who decide whether or not an intern deserves to be paid. And even then, judges are not required to use the DOL standards.

This means if a student takes an internship and feels what they’re doing merits pay, they can fight for it — even if the employer says they’ve used the seven-factor test.

The new standard is there to help interns, not to trap them in a non-paying job. They have the right to question what they’re being asked to do. Make sure that your students understand how they can exercise that right. Give them a list of people to contact and let them know they can always reach out to you if they have questions.

The new DOL internship guidelines mean a lot of big changes, especially for students. Guide them through the process so they can find the right position, whether it pays or not.

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Val Matta
Val Matta
Val Matta, Managing Director of CareerShift, co-founded the company in 2005 to help individuals bridge the gap between education and employment.  As a recognized expert in the field, Val is a frequent speaker on career management, networking, and job hunting strategies.  You can connect with her and the CareerShift team on FacebookLinkedIn, and Twitter.