internNE, Powered by Aksarben
Paying Your Interns
internNE Requirements
Internships through the internNE, Powered by Askarben initiative must pay at least the state minimum wage. In 2023, the state minimum wage is $10.50 per hour; this will increase to $12.00 on January 1, 2024.
Wages as an internNE Eligible Expense for Reimbursement
internNE grants are provided as reimbursements of eligible expenses. Wages paid to an intern is one of the eligible, reimbursable expenses for employers with less than 150 full-time equivalent employees. Other eligible, reimbursable expenses for any employer with an internNE grant include tuition reimbursement, internship housing, transportation expenses relating to the internship, and internship recruitment or administrative costs. The grant can reimburse 50% of eligible expenses, up to $7,500 per internship. The employer is expected to provide a minimum 1:1 match.
Employers with 150 or more full-time equivalent employees are not able to be reimbursed for wages paid to an intern through the internNE grant. However, employers may be able to find additional funding sources for intern wages, such as the Workforce Innovation and Opportunity Act (WIOA). WIOA offers youth, adult and dislocated worker programs that could potentially fund youth and young adult on-the-job training such as internships and apprenticeships. Contacts are specific to the
Lincoln,
Omaha and
Greater Nebraska areas.
Why Pay an Intern?
If an employer is deciding between paid vs. unpaid internships, they should be aware of the
U.S. Fair Labor Standards Act and if this Act applies to the organization. The U.S. Fair Labor Standards Act restricts an employer’s ability to use unpaid interns. This Act applies to organizations that have two or more employees directly engaged in interstate commerce as well as annual sales of $500,000 or more. Interns who qualify as trainees do not have to be paid. There are six criteria for determining trainee status (as determined by the U.S. Department of Labor).
Beyond potential legal obligations and internNE grant requirements, there are other advantages to paying an intern:
- Paying your intern a wage creates ownership in the program by both the employer and intern. Unpaid interns may view the internship as a volunteer opportunity, potentially reducing their commitment or motivation.
- Advertising paid internships will likely increase interest in the position, boost your potential candidate pool, and improve your chances of finding your ideal candidate.
Determining Intern Wages
Resources for determining wages for interns:
- Zip Recruiter: The average intern salary in Nebraska is $14.00/hour.
- National Association of Colleges & Employers (NACE) “How Much Should You Pay an Intern?”: “The average hourly wage for a bachelor’s degree intern is $16.26. Generally, the closer to the terminal degree, the higher the internship wage.”
- NACE Key Factors to consider when setting intern salaries: “Many employers use the salaries they pay new college hires as the starting point for determining intern wages. Intern pay rates vary based on the student’s major and the functional area in which the student is assigned, just as new college hire rates will.”
- NEworks Labor Marketing Information > Employment and Wage Data > Occupation Data > Occupational Employment and Wage Statistics: Average entry level job wage is $14.01/hour.
Additional wage considerations:
- Nebraska minimum wage is currently $10.50 per hour, and it will increase to $12.00/hour on January 1, 2024.
- Students in technical fields, such as engineering and information technology, are generally paid more than nontechnical fields.
- Pay for interns often varies by location, type of industry, size of employer, etc.
- Wages for most internships are usually determined before the intern is hired and are not typically negotiated. Recently, more intern candidates are asking to negotiate wages before accepting an offer. Have a plan in place for how to handle these requests.
Competing with Other Student Employment Opportunities
Students face various financial responsibilities, including school fees, housing costs, and other expenses, alongside numerous employment opportunities. Even fast-food restaurants, for instance, which often offer wages that exceed the minimum requirement, making an appealing choice for students. To attract capable interns, employers should prioritize offering competitive salaries that align with prevailing market rates.
Tuition Reimbursement
According to the NACE 2021 Student Survey, 67.2% of students indicated that tuition reimbursement as a job benefit is either very or extremely important. A typical employer tuition reimbursement program enables the employer to cover some or all of the cost of an employee’s undergraduate or graduate degree program and education.
Employers should note that receiving tuition reimbursement can impact the intern’s taxes (and possibly qualify as a tax deduction for the employer) and financial aid. Federal tax law allows employers to provide up to $5,250 in tuition assistance to employees tax free every year, as long as the employer has a written educational assistance program policy and meets the federal requirements. Learn more
here.
Employers should create or update their tuition reimbursement policy and consider the following questions:
- Who is eligible to receive tuition reimbursement?
- What courses/degrees/programs are eligible?
- Does the recipient need to maintain certain grades?
- What is the approval process? Will there be an official request form?
- How will the reimbursement happen (e.g. directly to the school or reimbursement to the employee)?
- Is there a requirement to be with the organization for a certain length of time before or after the reimbursement?
- What are the necessary deadlines?
Tuition Reimbursement as an internNE Eligible Expense for Reimbursement
The internNE grants allow tuition reimbursement as an expense that is eligible for reimbursement. More information will be provided soon regarding exactly what is eligible and documentation needed for reimbursement.
Housing Assistance
You’ve found the perfect intern candidate with all the skills needed to help your organization grow. One problem – the intern lives in another community. Students may be in the middle of a lease, or your rural community may lack affordable rental properties that offer short-term leases to students. Whatever the issues, housing an intern can be a daunting task and a major barrier to offering and accepting internships.
Prospective interns may be unfamiliar with your community, and the intern(s) may need help finding affordable, safe and strategically located housing. As an employer, it is a good idea to be ready and willing to assist interns in finding housing and to have a good feel for the local housing market. It is always best to have housing options lined up prior to hiring an intern to avoid future delays and obstacles.
Housing assistance, whether provided as a reimbursement or stipend, is frequently considered a fringe benefit and considered taxable income. Employers should consult federal tax laws regarding taxable and nontaxable benefits.
Housing Assistance as an internNE Eligible Expense for Reimbursement
internNE grants allow housing assistance as an expense that is eligible for reimbursement. More information will be provided soon regarding exactly what is eligible and documentation needed for reimbursement.
Know Your Market
- How many rental properties are available on the market? (Check out www.housing.ne.gov for housing options in your community.)
- What is the average rent?
- What are the average costs for utilities (gas, water and electricity)?
- Are there laundry facilities available?
- How much is the security deposit?
- Do any rental properties offer short-term leases (i.e. summer break)?
- Where are the rental units located in relation to other establishments and your organization?
- What is the general atmosphere around the available rental properties?
Get Creative with Housing
- College and university housing: Is there a college or university nearby that offers dormitory housing?
- Are other area organizations hiring interns? Is partnering with these local organizations to connect students an option? Not only will it reduce rent per intern, but it also will help interns connect with one another.
- Area realtors may know of properties that have been on the market for an extended period of time but are still in good condition. They may be able to encourage sellers to offer temporary short-term rentals.
- Offer to cover housing costs for interns who may be in the middle of leases in other communities and unable to afford another lease in your community.
- If you’re planning to offer multiple internships at one time, or hiring interns consecutively, you might consider purchasing a standard single-family home to serve as temporary rental housing for interns (and full-time employees if needed in the future). This solution also serves as a great way to maintain and improve the overall quality and appearance of housing stock and your community. If the intern decides to stay as a full-time employee, they could be given the option to purchase the house.
- There may be community members who have rooms or areas of their homes to temporarily rent to interns.
Transportation Expenses
If the internship position requires students to travel a significant distance to the employer (typically relevant for employers in rural areas) there are several options to consider that may make the students’ experience more worthwhile.
- If the intern will incur significant personal commuting expenses, consider paying or reimbursing these expenses.
- If the internship is limited to the summer months, consider providing housing assistance (finding housing and/or provide a stipend for housing costs) so students can work onsite.
- If the internship takes place during the school year, students will most likely live within minutes of their academic institution, and a remote/work from home internship should be considered.
If the internship requires travel where the student needs to provide their own transportation, the employer should have an established reimbursement policy and that should be communicated with the intern during the onboarding process. Employers often pay or reimburse an employee’s work-related travel expenses (such as a short-term trip). Employers may choose to also pay or reimburse an employee’s travel between their residence and regular place of work, which would be considered personal commuting expenses. If personal commuting expenses are paid or reimbursed by the employer, they are likely taxable income to the employee. Employers should consult federal tax laws regarding taxable and nontaxable income and benefits.
Transportation as an internNE Eligible Expense for Reimbursement
internNE grants allow transportation expenses relating to internships as an expense that is eligible for reimbursement. More information will be provided soon regarding exactly what is eligible and documentation needed for reimbursement.
Remote Internships vs. In-person Internships
Whether you’re in a rural community or metropolitan city, the advantages and disadvantages of on-site internships, remote internships, and hybrid should be considered when designing the program. According to research conducted by NACE, nearly half of students surveyed had a preference for hybrid work arrangements, nearly half had a preference for in-person work arrangements and about 1 in 10 preferred to work only remotely. Additionally, nearly two-thirds of employers responding to the 2022-2023 NACE Hiring Projections survey expected to provide their interns with a hybrid experience.
Things to consider if you determine a hybrid or remote internship is right for your organization:
- Does the student have the appropriate equipment to complete the assigned tasks?
- Does the student have a designated area away from distractions where he or she can work?
- Is the intern supervisor comfortable managing off-site interns?
- If the intern is considered fully remote but needs to visit the on-site location, will mileage be reimbursed?
- How can the intern network with other staff to create team trust and loyalty? Some companies set up online discussion forums or arrange outings so virtual workers can mingle. Other employers encourage virtual interaction amongst the team in real time by using headsets and cameras.
- What additional advice or recommendations are available for remote interns? While these students may have greater flexibility in their work schedule, they also must be mindful to balance their internships with other activities (school and personal lives). Tip: target self-starters during interviews.
Benefits of in-person internships for employers:
- Provides an opportunity for instant communication and feedback
- May inspire interns’ commitment to the employer as they build personal relationships
- Allows greater personal interaction with the intern and a better understanding of their areas of interest and skills that may help when assigning project tasks
- Allows interns greater flexibility in helping with last-minute or immediate tasks
Benefits of in-person internships for students:
- Provides experience working in a professional environment
- Allows for direct contact and more personal interaction with supervisors, mentors, employees and other interns
- Allows students to more wholistically evaluate the office culture
Benefits of remote internships for employers:
- Creates a larger applicant pool leading to the greater probability of discovering the student that’s a perfect fit for the organization
- Allows greater leeway in using interns on a project-by-project basis (especially for small employers that don’t know if they have enough work for an internship program)
- Reduces workspace and equipment costs
Benefits of remote internships for students:
- Allows flexibility for the students who can then complete projects within their busy schedules
- Allows access to internship opportunities in areas outside of their normal reach
- Provides internship opportunities for students who don’t have adequate transportation
Recommendations:
- Provide detailed objectives from the beginning so there is little confusion
- Give students challenging tasks, but also provide proper direction
- Maintain frequent contact with the intern(s) via phone and email
- Use technology when possible; set up video communications to allow for increased interaction
- If possible, visit students on campus every few weeks to answer any questions and ensure they are on the right track
Other Forms of Benefits
Offering benefits may provide incentives for talented students to accept one internship position over another or increase the interns’ commitment during the experience.
Benefits that may be expenses that are eligible for reimbursement through the internNE grant:
- Tuition reimbursement
- Housing assistance
- Transportation expenses
Other benefits:
- Sign-on bonuses
- Vacation time accrual and/or upfront vacation time
- Paid holidays
- Opportunity for academic credit (Inform your intern about this possibility)
- Scholarships
- Social activities
- Time worked as an intern can accumulate and apply toward benefits if turned into a full-time employee after graduation
- Medical and/or dental benefits
Check out the entire guidebook for all information on developing a successful internship program.
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