136: Apprenticeship vs Internship

Have you ever thought of creating an apprenticeship or internship?
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“Furthermore, many colleges and universities fail to help students graduate with the skills necessary to secure high paying jobs in today’s workforce.” 

Are you confused about the differences between an apprenticeship and an internship?

An apprenticeship is an on-the-job training program which includes job related instruction, typically provided in a classroom setting. Apprenticeships can last up to 6 years.

An internship is on-the-job learning and doesn’t usually include classroom style training. Internships generally only last a few months at a time because they are intended for college undergraduates.

Apprenticeship:  

Apprenticeships are mostly offered by larger employers because they’re not very easy to setup and you have to work with several third-parties, including either the federal or state government. You should register your program, although it doesn’t have to be, but I can’t see why you’d create an apprenticeship program and not register it. That would be like dieting and exercising and not losing any weight.

Registered Apprenticeships are programs that have been certified by either the federal Office of Apprenticeship, or the equivalent state agency. Half the states have their own agency that does the certifying and the other half use the federal Office of Apprenticeship.

According to the DOL, the average starting wage for an apprentice is $15.00 per hour and the average wage for a graduate is $60,000.

Employers who have registered apprenticeship programs get support from the federal government’s ApprenticeshipUSA network. They get federal and state tax credits, and they get federal subsidies to help cover program expenses.

UPS has a registered program for drivers, operations, and automotive repair positions.

Apprenticeships are corporate welfare programs provided at the expense of taxpayers. They put small businesses at a disadvantage because the administrative complexity favors large corporations.

A new executive order was issued by Trump on June 15, 2017. It directs the U.S. Department of Labor to work with the Secretary of Education and the Secretary of Commerce to create regulations that will encourage industry and trade groups, nonprofits, unions and other organizations to develop new apprenticeship programs.

Hopefully this means making apprenticeships easier to implement and more available to small employers.

The order also requires the Department of Commerce and the DOL to promote apprenticeship programs among business leaders in manufacturing, infrastructure, cybersecurity and health care.

The new Secretary of Labor, Andrew Acosta, said:

“The U.S. Department of Labor will work expeditiously to execute the president’s vision and begin to implement measures to expand the apprenticeship and vocational training programs that can help our economy thrive, while keeping good, high-paying jobs in America.”

So, we’ll see what happens but I’m betting on more the same slop. I doubt the changes will make apprenticeship programs more accessible to you, the small employer.

At least the order acknowledges the pathetic state of our college and university education system. It says:

“Higher education, however, is becoming increasingly unaffordable.  Furthermore, many colleges and universities fail to help students graduate with the skills necessary to secure high paying jobs in today’s workforce.  Far too many individuals today find themselves with crushing student debt and no direct connection to jobs.”

I totally agree with that statement, but the answer is not reform. Why is the government even involved in this? Why do we need an executive order? Because the federal government has their grubby mittens all over the labor market. If government was such an effective tool than why do have these problems? Everything they regulate is a mess. I guess the problem is we don’t have enough of it…. yeah, that’s the answer, more government regulation.

Internship:

Internships are much more common among small businesses because they are much easier to implement. They don’t require government approval or license.

There isn’t anything technical about an internship. It’s really nothing more than a decision to hire a temporary employee

The thing is, interns are not free labor. They are employees, and they must be paid just like any other employee. The Fair Labor Standards Act applies so you must pay them at least minimum wage and overtime for hours worked in excess of 40 in a week.

UNLESS… your internship meets the following requirements:

  1. The internship provides the same type of training that would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion, its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

The most common areas of analysis when trying to determine weather an intern is an employee or not are: 1) the education environment, 2) weather or not the intern is replacing or displacing a regular employee, 3) level of supervision, and 4) post internship job entitlement.

If the program is centered around a classroom style experience, and especially if a college or university is overseeing the learning and giving credits, then you’re likely to pass this requirement. If you’re teaching universal skills and not just those specific to your operations, and the actual work their doing is not routine, regular and recurring, and you aren’t depending on the work they do, then again, you’ll pass this requirement.

But, if they are doing productive work and you are benefiting from it, that’s an employee.

If your interns are shadowing your employees rather than working as substitutes for regular employees, then you’ll pass the displacement requirement. But if they are working and being supervised like your regular employees, then they’re an employee too.

And finally, the internship should be of a fixed amount of time and determined before the internship begins. An internship is not an employment trial period and you shouldn’t give them the expectation that you may hire them on a permanent basis afterwards.

Too bad you aren’t free to enter into a voluntary agreements with an individual to be an intern. The real losers in this deal are the youth. Just like Seattle has discovered relative to their minimum wage laws, young workers miss out on opportunities that would otherwise exist at a lower cost. But, I guess the master labor market planners, most of whom have never owned a business, know what’s best for everyone.

About the author, Thomas

I have 20 of years insurance industry experience in C-level management, focusing on all aspects of workers compensation, risk management, loss control, employee benefits, HR, payroll and professional employer organization (“PEO”) operations. Currently, I am the owner and CEO of Humanly HR, and founder and host of SmallBiz Brainiac; a podcast providing employer intelligence to small business owners.

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