The Biggest Mistakes Small Businesses Make When Hiring Summer Interns

This time of year, I get a lot of questions about summer interns. Sometimes a college student reaches out offering to "work for free." Sometimes it's the other way around, where you have a project that needs an extra set of hands, and an intern seems like the perfect fit. 

The instinct is good, but the execution is where business owners run into trouble.

Hiring an intern isn't like hiring a temp. There are real rules involved, and getting them wrong isn't just a compliance problem. You could also end up shortchanging someone who trusted you with their time and their career.

At Whirks, we field these questions every spring, usually right after a well-meaning "Yes!" has turned into a wage dispute or a child labor violation. So, before you say yes, let me walk you through the mistakes that catch owners off guard and how to avoid each one.

Do You Have to Pay a Summer Intern?

In most cases, yes. The Fair Labor Standards Act (FLSA) doesn't have a blanket exemption for interns, but it does provide a framework for determining when an unpaid arrangement is actually legal.

The Department of Labor uses what's called the "primary beneficiary test," which weighs seven factors:

• Is it clear that neither party expects compensation?
• Does the internship provide training similar to an educational environment?
• Is it tied to the intern's formal education program or academic credit?
• Does it accommodate the intern's academic schedule?
• Is the duration limited to a period of beneficial learning?
• Does the intern's work complement, rather than replace, your paid staff?
• Do both parties understand there's no guarantee of a job at the end?

No single factor in this list is more important than the others, and no one factor disqualifies an arrangement on its own. 

At its core, the test asks a simple question: Who's really getting the most out of this relationship: You, or the intern? If your intern isn't earning academic credit, the answer is almost certainly you. That makes them an employee, and employees cannot waive their right to fair pay. Even if they offer to work for free, that agreement would not hold up.

If you're reading through this list and feeling uncertain? Just pay them. It's the right call legally, and it's the right call practically. Paid internships attract better candidates, create better outcomes, and protect you from a future dispute.

7 Things to Do Before You Post an Internship

Luckily, getting this right doesn't require a legal team. It just requires some intentionality upfront. Work through these seven checks before you post the role:

1. Run the primary beneficiary test. 

The DOL's guidance is publicly available. Go through the seven factors honestly. If you're not sure where you land, assume it's paid.

2. Define the internship and who's running it. 

Put it all in writing. What will they actually do? What will they learn? And who's responsible for supervising them? Both parties should be clear before day one. Reliable supervision heads off the kind of problems that lead to HR conversations you don't want to have.

3. Give them real work, not coffee runs.

A "go get my coffee" internship is a liability. If your intern isn't doing work that teaches them something, you're back to the primary beneficiary test, and you already know how that ends.

4. Get documentation from the school (if unpaid). 

If the internship is tied to academic credit, ask the school for formal documentation confirming the educational relevance. This protects you and reinforces the legitimacy of the arrangement.

5. Review your liability coverage. 

Does your business insurance cover interns? Does the school carry student liability insurance? These are worth a quick conversation with your broker before, not after, something goes sideways.

6. Check child labor laws if you're hiring minors.

If your intern is still in high school, federal and state child labor provisions may limit their hours and the types of work they can perform. Don't assume what's fine for a college student applies to a 16-year-old.

7. Check your state laws, not just federal. 

California and New York have stricter rules than the FLSA, and your state might too. Make sure you know what your state requires before you make an offer.

Once you hire an intern, onboarding should be simple. Run your interns through the same trainings and document reviews as everyone else.

Why a Well-Run Internship Is Worth the Effort

A well-run internship is a talent pipeline. Best case, you find someone great, invest in them for a summer, and bring them on when the timing is right. They already know your business, your culture, and your people. And even if it doesn't work out, they'll remember how you treated them and send classmates your way. 

Hiring the intern is the easy part. The handful of rules underneath it need more attention. How you address the pay question, the paperwork, and the federal and state child labor laws decides whether a good idea stays a good one.

At Whirks, this is the work we do every day, helping small business owners handle payroll, HR, and compliance without second-guessing every decision.

A summer intern might be your first hire of the season, but it won't be your last. The same care that goes into getting an internship right pays off with every role you fill. If you want a repeatable way to find people who fit, here's how to build your ideal employee profile in four steps.