Are Unpaid Internships Legal?
To note: I am not a lawyer, and in no way should this be taken as legal advice. Please consult a legal professional with any questions or concerns.
Are unpaid internships legal? Generally speaking, yes, as long as you (the intern), not the employer, are the "primary beneficiary" of the work arrangement.
What makes this difficult is its subjectivity – you and your employer may have differing views on who benefits most from the arrangement.
It’s safe to assume that all unpaid internships are mutually beneficial to some degree, otherwise they wouldn’t exist. However, your willingness to work unpaid does not alone make it legal.
The Department of Labor addresses this with the flexible seven-part Primary Beneficiary Test. Please note that this test is for for-profit organizations only.
According to the test, an intern is a primary beneficiary by the extent to which:
1. The intern is aware that they will be uncompensated.
2. Training is comparable to training received at an educational institution.
3. The internship is tied to the intern's current educational program (e.g., with academic credit).
4. The internship accommodates that intern's academic calendar.
5. The internship is limited to the period during which the intern receives beneficial learning.
6. The intern's work complements (not replaces) existing employees' work, while still providing beneficial learning.
7. It is understood that the internship does not provide entitlement to a job at its conclusion.
Employers also should check with their state, as some make the flexible guidelines of the seven-point test mandatory, and others provide additional criteria.
New York includes that internships must provide transferable rather than company-specific training, and cannot be of any immediate advantage to the employer – even when the intern is the primary beneficiary.
California has one of the strictest stances on unpaid internships, requiring all programs to be conducted through and supervised by an accredited school or vocational program.
Under the Fair Labor Standards Act of 1938, any employee of a for-profit company must be paid for their work. However, interns are not considered employees under the FLSA. But just because your title is "intern," it does not waive your right to compensation.
Don’t assume that an internship is compensated just because it isn’t marked unpaid, either. Make sure to inquire early on in the interview process, so there are no surprises.
In short, do your research, ask questions, and communicate clearly with your employer. If you feel that your internship is not following these guidelines, don’t sit and complain about it, quit in a ball of fury, or feel like you’re being held hostage. Take action and have a professional, non-emotional conversation with your boss and discuss the situation. If it doesn’t improve, speak to them again, or quit.
