The Legality of Unpaid Internships

Unpaid internships have become an increasingly common way for young professionals to gain experience and connections in their field of interest. However, the rise in such labor has led state and federal agencies to crack down on employers using internships in violation of minimum wage law. Usually, abuse is unintentional and due primarily to a failure to understand the legal requirements for unpaid internships. So, what are the criteria applied in determining the legality of such work? The federal Department of Labor has identified the following six criteria that workers must satisfy in order to qualify as an unpaid intern:

1. The internship is similar to training which would be given in an educational environment;

2. The internship experience is for the benefit of the intern;

3. The intern does not displace regular employees, but works under close supervision of existing staff;

4. The employer that provides the training derives no immediate advantage from the activities of the intern and, on occasion, its operations may actually be impeded;

5. The intern is not necessarily entitled to a job at the conclusion of the internship; and

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

The criterion which most often triggers a finding that unpaid internship status is improper is number two—that the internship is for the benefit of the intern. Thus, employers should take extra care to ensure their interns do not perform work that primarily benefits the company. Work is seen as primarily benefiting the company most often in cases where the employer merely uses interns in lieu of hiring employees and where the employer does not help the intern learn and apply relevant transferable skills (i.e., performing menial filing tasks and errands).

To avoid this pitfall, companies should ensure that the number of individuals they employ always significantly exceeds their number of unpaid interns. Companies utilizing interns should also develop “intern projects” with specific educational objectives and written “learning goals” to ensure the internship has an academic and practical value for the intern, not only in case of an audit or complaint, but for the general benefit of the intern as well. While the performance of occasional menial tasks will not automatically disqualify an individual from unpaid internship status, errands, filing, and secretarial tasks should always be incidental and not essential to their work at the company.

Utilizing unpaid interns is a great way for a company to give something back, keep its work environment fresh and exciting, and perhaps even find future full-time employees. Provided employers abide by the guidelines discussed above, unpaid internships can be a tremendous benefit to all parties involved.