Q. "Are we required to pay summer interns?"
Answer:
Generally, yes, though it depends on who benefits most from their work. The U.S. Department of Labor (DOL) has adopted the “primary beneficiary test" to determine whether a worker is an employee or or unpaid intern.
If the worker is the primary beneficiary of the arrangement—as opposed to the employer—they can be an unpaid intern. If the employer is the primary beneficiary, the worker is an employee and must be paid minimum wage and overtime.
Keep in mind:
No single factor dictates “employee” status
Each case must be carefully and individually analyzed
The professional or academic benefit should be abundantly clear
Employers should consider the following when determining who primarily benefits:
Is compensation or a paid position at the end of the internship expected? Has payment been discussed or implied?
In what ways is the training provided similar to an educational environment and/or tied to a formal education program?
What significant educational benefits exist? Academic credit?
How are existing academic commitments accommodated?
Is the duration limited to when beneficial learning is provided?
How does the intern's work impact the work of paid employees?
Additionally, ensure compliance with state and federal laws to avoid violating applicable child labor laws when hiring interns under the age of 18. When in doubt, it's best to classify as an employee!