Heard It on the Hotline: Summer Employees

As summer approaches, members will consider bringing on summer employees and interns. We receive a handful of questions through the Hotline as members prepare for their temporary summer employees. Some of the most frequently asked questions include:

Q: Can internships be unpaid, or must all interns be compensated?

A: Internships can be unpaid for nonprofit and for-profit organizations. However, the intern must not produce anything of value for the organization, and the organization cannot benefit from the intern’s work. The internship would need to be structured as a learning experience rather than performing work an otherwise paid individual would perform. Employers should also consider the difficulty of obtaining talent in our competitive market and whether they can even attract an intern without compensation. MRA’s article on To Pay or Not To Pay Interns and the U.S. Department of Labor Fact Sheet #71 provide further detail.

Q: If we hire an employee under the age of 18, what hours can they work?

A: Employers must comply with federal, state, and local laws on hours worked for minors. Permittable hours of work vary based on the season as well as the age of the minor. The U.S. Department of Labor has compiled a chart with acceptable working hours under federal and state laws: Selected State Child Labor Standards Affecting Minors Under 18 in Non-farm Employment as of January 1, 2023.

Q: Can an employee who is under the age of 18 perform any type of work for the company?

A: Like working hours, the type of work a minor can perform may be specified by law. Acceptable duties also vary based on the age of the minor. Under federal law, for example, the Child Labor Provisions of the FLSA guide specify duties a minor can or cannot perform. Minors working in Wisconsin should follow the Guide to Wisconsin’s Employment of Minors. Minors in Minnesota should follow the Teen Workers information. In Illinois: Child Labor Law Compliance. In Iowa: Hiring Iowa Teens.

The U.S. Department of Labor has also published a Young Worker Toolkit with resources to assist employers, employees, and parents in navigating applicable federal laws.

Q: Are summer workers eligible for company-provided benefits?

A: Companies that employed an average of 50 or more full-time equivalent employees (30 hours per week or 130 hours per month) in the preceding calendar year are considered Applicable Large Employers (ALEs) and are subject to the requirements of the Affordable Care Act (ACA). The ACA requires that ALEs offer benefits to seasonal employees—expected duration is less than 6 months and if the job starts and stops around the same time each year because of specific factors—in the same way they do to regular variable-hour employees. The IRS, however, considers interns to be regular employees. The internship might be seasonal. The appropriate classification will be based on the specifics of each individual internship.

Employers should proceed with caution labeling an internship as seasonal work. Experts suggest that, if a paid intern works full time (30 or more hours per week), offering health insurance might be safest. If the internship is less than full time, ALEs should follow the measurement method specified by the plan.

Organizations that are not ALEs should follow their plan descriptions and consult with their brokers to determine health insurance coverage eligibility for summer workers, including interns.

All employers must also refer to their plan documents for other health and welfare benefits to determine eligibility requirements. And company policies must be followed if you offer any other additional benefits, such as paid time off. Employers should ensure that benefit plans and company policies address eligibility requirements for all worker types and classifications. Additionally, other laws may protect employees who only work for you during the summer months. When in doubt, check for eligibility and do not assume the employee is not covered.

If you have questions on summer employment, MRA’s 24/7 HR Hotline Advisors are here to help at 866-HR-Hotline (866.474.6854) or email [email protected].