questionsis there any legal definition of what qualifies…

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Also, we are not a startup struggling for money. The company's been in business for 12 years, I've been here for 2 and we have over 40 employees.

vote-for7vote-against

Who is your HR rep? If it's the boss then you're going to have issues. If not then it's their job to make sure hiring is on the up and up. This guy sounds a bit shady, I hope you're getting paid enough to deal with his nonsense.

vote-for7vote-against

In my state, we have an "at will employment." That means your employer can fire you for no reason at all and you can quit at any time. So, if you want to avoid paying for health care or other benefits, you can just fire people and rehire new people every three months. There is no need to make up a reason to fire anyone. You don't have to bother posting things as an Intern position or anything like that.

Also, if you really dislike paying for benefits, hire a contractor.

At my day job, we hire interns all the time. Some are paid, some are not. Not sure what the criteria is to get a paid versus non paid Intern position but I'm sure there is something they base it on. You would think the minimum wage laws would force you to have to pay for the Interns but my guess is that's not true for people working for you for the purpose of getting experience and course credit.

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We don't have HR. He is basically our HR rep. We forced him into a meeting 3 weeks ago demanding we get an HR rep and airing out a long list of grievances. It's a long, complicated story, but basically he said he agreed that we definitely need one and will start looking for one.

Instead, he posts this "intern" job. Oy.

That applicant that graduated 5 years ago also lives 90 - 120 minutes away. Times really are tough.

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If he is listing it as an internship job and it is actually regular employment, I am 99% sure it is illegal for him to do that. Report him to the requisite agency and let them sort it out (I'm not sure what agency this would be).
Internships are supposed to be entry-level, temporary positions for people still in school so they can gain experience and build their network of contacts. If he's listing a permanent hire position as an internship, it's unethical at best and illegal at worst. Don't take any chances.

See this webpage, specifically the heading "Distinguishing Interns from Employees."
http://definitions.uslegal.com/i/internship/
Of course, IANAL, so don't take my advice as 100% certain legal advice.

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The applicant that lives far away, my boss just asked: "What if she worked from home?"

HOW IS THAT AN INTERNSHIP?!

STOP BEING SUCH A CHEAPASS!

/RANT

vote-for9vote-against

There absolutely is a legal definition from the Department of Labor. Ever since 2008 there had been in increasing numbers of abuses in several industries (publishing, media, among others). Internships must have a primarily educational purpose, and primarily for the benefit of the intern. Getting somebody to work as slave labor doing menial tasks not associated with the business (like filing, cleaning, getting coffee, and so on) is not kosher.

http://www.dol.gov/whd/regs/compliance/whdfs71.htm