Internships · Hiring

How much should you pay startup interns?

Neha Palacherla Marketing

May 8th, 2014

Nathan Parcells of InternMatch just published a guest post on FounderDating (http://founderdating.com/5-things-to-know-before-hiring-startup-interns/) wtih a guideline, but wondering what other people think or have done with interns at their startup, with both non-technical and technical hires

Anonymous

May 23rd, 2014

Passive approach:
Pay them $10-$20 based on skills, merit, affinity with work, importance of the work, etc.

Aggressive approach:
Pay them $0. They are lucky to work in a high-paced learning environment where they'll be working on real stuff, learn the true skills of the trade quickly, make lifetime connections and become blessed by your awesome mentorship.

For either approach: Ride them HARD. They are busy with school, odd relationships, crappy side jobs, etc. If you treat them fairly and respect them as adults they'll get nothing done. Ride them hard at all times. As much as you can, coach them like British soccer coaches = treat the youngsters like it is next to impossible for them to do anything right, and they are always an inch away from breaking your patience. (see Gordon Ramsay)

Rebecca Eisenberg attorney, advisor, investor, advocate.

May 25th, 2014

The laws of paying interns differ on a state by state basis, so it is best not to generalize across the board in the U.S.  Generally speaking, it is a best practice either to pay interns an hourly rate that is at least minimum wage (plus overtime) or else work with a valid educational institution to ensure that school credit is given in lieu of wages.  Additionally, state and federal employment protections will also apply to interns in a similar manner to the way that they apply to regular consultants and contractors, per the IRS's generally accepted "20-factor" test and other circumstances specific to the given situation.

Many companies succeed in ignoring these requirements, but they do so at their own risk.  In my mind, it is not only about avoiding law suits, but also about recruiting in a competitive market for the best talent, and creating the kind of work environment that accurately reflects your and your company's values. 

Ben Sweat Director, Product at Idealab

May 8th, 2014

We pay $10/hr for an intern straight out of high school and for every semester completed we pay an extra dollar per hour. Generally, interns are product/business types. But we have a couple of engineers as well. Sent from my iPhone

Anonymous

May 24th, 2014

Shahab, I'd recommend you read up on the subject of unpaid internships.

There's the recent (and unique) case of the Black Swan lawsuit, but otherwise learning-based unpaid internships are a strong part of the education system in the US.

Anyone worried about the legality should consult with a legal expert. In general, unpaid internships are considered good when the relationship is tipped towards benefiting the intern. Thus the Department Of Labor has 6 somewhat clear requisites for a valid unpaid internship.

Bottom line: interns must be doing something of value to their professional enrichment - you can't have them only making photocopies and fetching coffee. They also have to be real interns (apprentice-level people,) not professionals being cheated out of fair payment.

I think it is a fair exchange: mediocre free labor in exchange for a strong learning opportunity. Higher education feels the same way, that's why pretty much any degree requires intern credits for which students have to pay out of pocket (in essence paying the school for the privilege of working for someone else.) IMO the most valuable aspect is the opportunity to try the relationship on for fit. Many companies hire the best suited interns at the end of their term (although you can't offer that up front, to stay on the safe side with the guidelines.)

Guillermo Schwartz Founder of the Diveling web platform

May 8th, 2014

Thank you for sharing the link. It was very clarifying. I wonder how successful hiring an intern would be when your startup does not have an office. When people work for it from home or from other companies.

Melissa Luther Freelance/Contract User Experience and Usability Consultant

May 18th, 2014

Working at a previous start-up, we paid GATech interns (grad students) $20 an hour for Summer (3 months)

Shahab Layeghi Software Professional

May 23rd, 2014

It's also illegal in US not to pay minimum wage (and overtime) to interns, unless you don't use the result of their work.  They can file individual wage claims or even class action and the company will have to deal with the labor dept and pay fines and lawyer fees.  Most interns don't know this.

Dan Walsh Technology Sales Manufacturer Rep SAP Oracle other

May 11th, 2014

A buddy of mine gets about 100 interns for free each year. They are grad students working on masters or phd and they get course credit from the college(s) because he designed their work as part of a learning curriculum, and got it approved. They get course credit and resume work experience with a letter of recommendation for good work. Meanwhole he avoids a half-million dollar payroll. I cant elaborate further but just goes to show, as an opposite side of the spectrum, that creativity can make a vast recurring student market into a robust intern program. He is able to afford office rent because of low payroll.

Suzanne Noble Founder of Frugl | Power Connector | PR Expert | Mentor

May 18th, 2014

In the UK, it's illegal to not pay an intern. Sure, there are programmes such as Interns Abroad where you can find a student for a couple of months but that's about it. I think the gov't minimum here is £6.21 an hour.