Hiring unpaid interns is a common but increasingly risky practice. Students are becoming increasingly aware of the legal and social issues surrounding unpaid internships, leading to a rise in lawsuits, PR backlashes and more against companies who do not pay. The goal of this slideshow is to share the legal issues and ethical issues surrounding unpaid interns, as well as the business benefits of paying interns (including increased retention and better talent) to help SMBs make the choice to pay and help University Managers make the case to their bosses and key decision makes to make the investment and change to paid.

1. How to Create a Paid Intern Program!
Get on the Right Side of History

2. Road Map
1.) Brief Background on Nathan and
InternMatch
2.) The real deal behind unpaid interns.
3.) 3 critical (non-legal) reasons to pay
your interns.
4.) How to get company buy-in for your
paid intern program.
5.) Typical compensation levels for
different interns
(marketing, engineering, design, and
more).
6.) Plenty of time for Q & A.

3. About InternMatch
• Started in 2009
• Over 600,000 unique student visitors a month
• Over 850direct university connections
Hello InternMatch,
"I just wanted to tell you that I'm a fan of InternMatch. I'm a student at ___ University in
Connecticut. Though it's supposed to be a "prestigious" university, it does not support
students who grew up in poverty like me. The administrators at the university do not
realize students like me will not have the luxury of simply entering the workforce via
family contacts. Gratitude for my newest internship goes almost entirely to InternMatch.
My university opens its career resources to students when they enter their third year of
studies. Those career resources were never made available to me; however, this year I
applied to a startup on InternMatch, they hired me and now I can focus on my studies
rather than figuring out what I'm going to do to make money this summer.”
Best Regards,
Student

4. Our Interns
InternMatch has now hired over 50 interns
** US Employers with 20+ Employees
• We have hired numerous
campus ambassadors at
schools including
MIT, Harvard, Upenn, Wisc
onsin, Michigan and more!

5. Why Hire Interns
0
2,000
4,000
6,000
8,000
10,000
12,000
July
Aug
Sept
Oct
Nov
Dec
Jan
Feb
March
April
New Aggregated
Internships
• Fill in critical skill gaps
• Pipeline for future hires
(http://venturebeat.com/2012/07/21/converting-interns-
to-hires/)
• Regional Expansion

6. Topic #2: Unpaid Internships
and the Law

7. Unpaid Internships and the Law
Have a Goal/Project in mind
DOL 6 Point Test
1.) The internship is similar to training which is
given at an educational facility.
2.) The internship experience is for the benefit of
the intern.
3.) The intern does not displace regular staff.
4.) The intern is not necessarily entitled to a job at
the end of the internship.
5.) The employer receives no immediate advantage
from the intern in fact the employer may be
impeded.
6.) The employer and the intern understand that the
intern is not entitled to wages during this period.
(http://www.internmatch.com/guides/everything-you-need-to-know-
about-intern-compensation)

8. Rising Social Awareness
• InternAware in Europe, just
opened US arm
• Occupy Wall Street protesting
unpaid fashion interns
• Charlie Rose paid $250,000
• Hootsuite in Canada now back
paying all interns from last year!
(over 500 comments on reddit).
Links to Key Articles:
Hootsuite:
http://www.vancouversun.com/news/metro/Vancouver+Ho
otSuite+faces+online+backlash+over+unpaid/8209279/sto
ry.html
Roberta’s Pizza:
http://www.dnainfo.com/new-
york/20130408/bushwick/doh-robertas-pizza-advertises-
for-unpaid-intern-upsets-neighborhood

9. Topic #3: Reasons to Pay

10. Diversity
According to a report by
the Center for American
Progress, minority
students are more likely
to be saddled with
student loan debt, with
81% of African American
students financing their
education through
federal loans.

11. A Case for Quality
Hiring top notch students with the right culture fit is essential for SMBs and Startups
+50K /
Fantastic Intern
-25K /
Mediocre Intern
• Autonomous but not
automatic
• Contributes energy
to office/team
• Future hire
• Can’t test assumptions
• Needs to be motivated
• Only around for 3
months

12. A Case For Quality
On InternMatch paid
positions get on average
2.5 times as many
applicants!

13. Building Your Culture
Student Quotes
“I didn't think I would see people defending unpaid internships. If
you're shadowing someone and you don't get paid, that's fine. But
if you're contributing to a for-profit company, even if it is for only
four months, then it's illegal and unethical on the company's part
not to pay you. I don't see how that point is debatable: if you work
you get paid, what's the issue?”
“This whole argument about unpaid internships being fair game just
because the student gets experience in return is not valid and
makes no sense. It almost adds up to the fact that you are working
an unpaid internship because you get experience (and not a
paycheck) in return. The irony? No one stops getting experience
once they start getting a paycheck?”
“I'm in my third unpaid internship (in New York City, nonetheless)
and it has only increased my stress level, as I have no regular
income. With the costs of living in the city, I only spend my money
on food and transportation and I still feel the strain every month.”
in mind
http://employerblog.internmatch.com/unpaid-internships-get-on-the-right-
side-of-history/

14. Long Term Value
• 41% of unpaid interns got a job
offer, compared to 63% of paid
interns
• 80% of employers use interns to
make FT hires
• 75.7% retention rate after one
year for FT employees who were
former interns (vs. 66.5% if not)
• 62.4% retention rate after 5 years
for former interns vs 48.5% for
those who were not
• Paid Interns far more likely
to accept a job than those
who aren’t
Source, ERE: http://www.ere.net/2013/02/11/why-it-pays-to-pay-your-interns/

15. Topic #4: Getting Company
Buy-In

16. A Look at Potential Costs/Benefits
Have a Goal/Project in mind
Assuming $10/hr x 40 hrs per week x 12 week internship
• One intern costs: $4,800
• Ten interns costs: $48,000
• One hundred interns cost: $480,000
Source: http://www.gradstaff.com/cost_of_hiring.html
Benefits
• Direct Value: Graphic Design Intern makes 10 infographics: $20,000
• Hiring Savings: Cost of making an entry-level hire estimated to be
$5,700 to $8,900. Plus over $1,000 in new training costs.
• For every new grad hire that doesn’t work out this cost doubles.
• New ideas and other intangibles.

17. How to Add Interns to Payroll
• Interns should not be contractors
• Interns should receive an offer
letter
• Interns should be added to
payroll, but not necessarily
benefits
Use our free guide: http://www.internmatch.com/guides/sample-internship-offer-letter

18. Topic #5: Typical
Compensation Levels

19. Decide on Compensation
• Marketing/Business: $10
- $12.50/hour
• CS $12.50 - $20/hour
• MBA $12.50 - $15/hour
Educational Compensation is worth more than $$$.
Learning software (Basecamp, Hootsuite, etc) is huge!

20. Educational Value Still Key!
Have a Goal/Project in mind
• What software will a
student learn?
HootSuite, Salesforce, Base
camp, InDesign, etc?
• What mentorship options
do you offer? Brown bag
lunches, weekly one on
ones and more.
• How much exposure does a
student get to different
functional areas of your
business?
Use our free template! Got to www.InternMatch.com/guides/gold-standard-internhip-posting

21. Have Fun
Have a Goal/Project in mind
• Interns can and
should impact your
culture
• They come and go
but you can have a
truly meaningful
impact on their
future

22. Interested in Using InternMatch?
Post positions at www.internmatch.com/employers

23. Thank You
Nathan Parcells, Founder/CMO
nathan@internmatch.com
301-873-8435