A key consideration for employers planning their summer internships is setting intern salaries. During this process, employers take into account major and functional area. Many employers also use the student’s degree and year of study in setting rates: Average salaries for interns tend to increase as students persist toward attaining higher degrees and by ascending class years.

Other steps employers take and factors they may consider when establishing salaries for interns include:

• Understanding interns’ employee classification—Interns typically fall into the “non-exempt” category due to the nature of their positions. As such, they are paid an hourly wage.
• Having a basis for 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.
• Making adjustments for location—If the internship is in a city with a high cost of living, some employers will pay students interning there a higher salary to account for this factor.
• Otherwise, being consistent—Interns will talk amongst themselves, so many organizations ensure that they apply their pay scales consistently.
• Establishing this as an annual process—Organizations can ensure they are in line with current intern pay rates by setting intern salaries each year. As part of the annual process, organizations should also audit salaries by various demographics—such as race/ethnicity, gender, and disability status, for example—to uncover inequities that need to be addressed.