Summer Intern Season Is Coming...Are You Actually Compliant?

Let's be honest about how most intern programs get set up.

Someone on the team mentions they need extra help over the summer. A manager says their nephew is looking for experience. An owner posts on LinkedIn and gets ten responses by Friday. And before anyone has asked a single legal question, you've got a 21-year-old starting Monday.

That's not a hiring process. That's a liability waiting to happen.

Summer intern season is here, and if you haven't thought through the compliance side of your internship program, now is the time. Before someone shows up, not after.

The Question Everyone Gets Wrong

The most common assumption we see? "We're not paying them, so it's not a big deal."

Actually, it's the opposite. Unpaid internships carry more legal scrutiny, not less. The moment you bring someone in without pay, you've taken on the burden of proving that the arrangement is legal.

Under the Fair Labor Standards Act (FLSA), the Department of Labor uses what's called the

Primary Beneficiary Test to determine whether an intern must be paid. It weighs seven factors, and no single one is automatically disqualifying. But the core question the test is asking is: who is actually benefiting here, you or the intern?

If the honest answer is "mostly us," you likely have an employee on your hands, not an intern.

The Seven Factors (Plain English Version)

Here's what the DOL is looking at:

1. Is it clear to both parties that there's no expectation of pay?

   
   

2. Does the internship provide real educational training, not just tasks?

   
   

3. Is it tied to a formal academic program or does the intern receive course credit?

   
   

4. Does the schedule align with the academic calendar?

   
   

5. Is the duration limited to a learning period, not just however long you need help?

   
   

6. Is the intern learning, or are they filling a role that a paid employee would otherwise hold?

   
   

7. Is it understood that the internship does not guarantee a job at the end?

If you can't answer most of those confidently and in writing, you're in gray territory.

What Does Intern Pay Actually Look Like?

If your intern doesn't meet the criteria for an unpaid arrangement, you need to know what you're on the hook for.

Michigan's current minimum wage is $13.73 per hour (as of January 1, 2026), well above the federal floor of $7.25. That's the floor. But market rates for paid interns run higher.

According to ZipRecruiter, the average pay for an intern in Michigan is around $14.85 per hour, while the national average sits at approximately $17.04 per hour. Indeed puts the Michigan figure closer to $19.17 per hour based on recent job postings, and nationally, Indeed reports an average of $20.33 per hour. For context on what degree-level interns are earning across industries, NACE's 2026 Internship and Co-op Survey found the average hourly wage for bachelor's-level interns at $23.35 nationally.

The range varies significantly by field. Engineering, finance, and tech interns typically command more. General business, admin, and operations roles tend to sit closer to the lower end of the range.

The takeaway: if you're structuring a paid internship, ensure you are at a reasonable starting point based on the state and national average. Going in at minimum wage and calling it a day puts you at a competitive disadvantage when recruiting.

Michigan Has Its Own Layer

Federal law is only part of the picture. Michigan employers need to know that the state minimum wage applies the moment an intern is classified as an employee. Overtime protections under state law apply as well.

The good news: Michigan's Earned Sick Time Act (ESTA) explicitly carves out unpaid interns and trainees from its eligibility requirements. But that exemption only applies if the internship is legitimately unpaid to begin with. You cannot use the exemption to your advantage if the underlying classification does not hold up.

What Documentation You Actually Need

Even a well-structured internship can fall apart in an audit or a complaint if you don't have the paperwork to back it up. At minimum, you should have:

• A written intern agreement that outlines the unpaid nature, the learning objectives, and the duration

• Confirmation of academic credit or enrollment (if applicable)

• A defined project scope that does not displace your regular workforce

• Emergency contact information and basic onboarding paperwork

• Clarity on whether your workplace policies (harassment, conduct, confidentiality) apply to interns (they should)

That last one matters more than people realize. Interns can file harassment and discrimination complaints in Michigan. Your policies need to cover them.

The Stuff Nobody Thinks About

Beyond classification and pay, a few things tend to get overlooked entirely:

• Workers' comp: In Michigan, unpaid interns may still require coverage depending on your industry and how they're engaged. Don't assume they're excluded.

  
  

• Onboarding: Interns shouldn't bypass your standard new hire process just because they're temporary. Safety training, policy acknowledgments, and system access reviews still apply.

  
  

• Offboarding: When the internship ends, are you revoking system access? Collecting company property? Having a clear end date in writing? Loose ends here create real risk.

So What Should You Do Before June 1?

If you're planning to bring on interns this summer, here's a quick gut-check:

• Do you have a written internship agreement? If not, draft one.

• Can you clearly explain how this benefits the intern's education more than your operations? If not, reconsider the structure.

• Do your HR policies explicitly cover interns? If not, update them.

• Are you prepared to pay Michigan minimum wage (and potentially more) if the classification does not hold? If not, revisit the arrangement.

And if the answer to most of those is "we haven't thought about it," that's exactly what we're here for.

Intern programs can be a great tool. They build your pipeline, support your community, and give emerging professionals real experience. But "we've always done it this way" is not a compliance strategy.

Get the structure right before the summer starts, not after you get a call from someone's attorney.

AlphaDog HR Solutions helps small and mid-size businesses build HR programs that are compliant, practical, and built to grow with you. Reach out if you want a second set of eyes on your internship program before summer kicks off.