While I am not one that usually looks forward to bathing suit season, as I skidded my way through the ice and snow last week, I thought "summer just can't get here fast enough!" However, for many students and employers alike, summer planning has been in full swing for months. No doubt students have been carefully crafting their cover letters while companies have spent countless hours preparing for their newest class of interns.
In addition to vetting resumes, many businesses are likely reviewing their internship programs given the recent headline grabbing FLSA class action settlements. While interns have generally been "paid" with resume building experience, rather than actual cash, the proliferation of class-action lawsuits alleging wage and hour violations have many employers reevaluating their internship programs and offering paid, rather than unpaid, internships. Businesses, though, should consider more than just compensation when preparing their offer letters.
By now most employers are aware that the Affordable Care Act applies to companies with 50 or more full-time employees. While most students will have coverage through their university, parents, or guardians, companies should still consider whether or not they need to offer their interns short-term health benefits. If an intern will be employed for only 3-months, it is likely that the employer does not need to offer health benefits. However, if the internship lasts 6 months or more, businesses should consider offering health coverage to their interns to avoid a penalty. Like all rules, though, there are exceptions. Companies may exclude their full-time paid interns if they can be classified as seasonal workers.
Businesses should also consider the impact interns will have on their overall count of full-time-equivalent employees. For those employers on the cusp of the 50-employee mark, the number of interns employed could push them across the threshold, making them subject to ACA compliance under the Employer Shared Responsibility Payment. This single factor may change the cost-benefit analysis of hiring seasonal employees over hiring interns.
While ACA may or may not affect a company's internship program, it is important for businesses to ensure not only are their interns benefiting from the real world experience their program has to offer, but that they are also offered benefits they may be entitled to under ACA.
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