When Are Unpaid Internships Legal?

We’re coming up on summer, season of internships. Many students take unpaid internships for the learning experience or because they will look good on a resume, but some of them are being cheated out of the wages they should be earning.

Under a federal law called the Fair Labor Standards Act employers must pay their interns unless they meet all six of these criteria:

  1. The training, even though it includes actual operation of the facilities of the employer, is similar to training available in a school;
  2. The training is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under their close supervision;
  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.

One good indicator that it is legal not to pay an intern is if the student is earning academic credit for her work, but that alone is not a substitute for meeting all six of the required factors.

Employers, take heed: just because you hire students for a limited time doesn’t excuse you from paying them. Note especially factor number four: interns often don’t help much and sometimes get in the way. If that isn’t true, they are entitled to (and worth) a paycheck!

 

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3 thoughts on “When Are Unpaid Internships Legal?

  1. MAB says:

    Unpaid internships are actually much worse in the food service industry than they are in “Corporate America”. They almost always fail these criteria. You can learn to chop vegetables in school, but you get to chop vegetables for another few months in a working kitchen and not get paid for it. #3 and #4 are always ignored. It’s free labor for the employer, pure and simple.

    I’ve seen interns (they often call them “externs” in food service) get hired after completing their indentured servitude, but they still got a few months of free work out of them and even that seems to skate on the edge of #5.

  2. [...] But sometimes it is legal not to pay interns. Under federal law (some states have additional requirements), unpaid internships are legal if they meet six criteria: [...]

  3. [...] But sometimes it is legal not to pay interns. Under federal law (some states have additional requirements), unpaid internships are legal if they meet six criteria: [...]

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