Is your unpaid internship legal?

The rules for what constitutes an unpaid internship were established in 1947.

Is your unpaid internship legal?

Find out what constitutes an unpaid internship.

Unpaid internships got a new round of scrutiny in 2013 when a federal district court judge in New York found Fox Searchlight Pictures violated unpaid internship rules by not paying two interns on the set of Black Swan. Contrary to popular belief, labeling a “job” an “internship” isn’t enough to make it legal to get unpaid labor.

Back in the day, being an intern was synonymous with coffee-fetcher and copy-maker, but if an employer is having you do only those kinds of tasks and not paying you for it, it’s illegal. After a number of lawsuits in the past decade, employers now have to follow a set of rules when it comes to how they treat their unpaid labor.

If you or a someone you know is on the hunt for an internship, here is what you need to know about intern rights and if an employer is following the law.

The big picture

The general rule on internships is "the primary benefit test," which is that interns have to be paid if the intern's work primarily benefits the company rather than the intern's education, explains Heather Bussing, a California Bay Area employment lawyer. “The converse is that if the work primarily benefits the intern's education, then the internship can be unpaid,” she says. 

While the employer may or may not understand the intern's academic program, the key factor that they must go by is if they would normally pay an employee to do the work that the intern is performing. “If you’re doing work that can’t be translated to your education, there’s something fishy going on,” says Kate Bischoff, an attorney with tHRive Law & Consulting LLC in Minneapolis. “If an intern is just getting coffee and making copies, the intern needs to make at least minimum wage.”

The legalese

Now that you have the gist as to the type of opportunity an employer must offer an intern, let’s break down the details. “The key legal question regarding interns is whether they are 'employees' or 'trainees' under the Fair Labor Standards Act (FLSA),” explains Lisa Milam, J.D., senior editor and analyst for Employment Law Daily.

The interpretation of this law has changed in recent years, she explains, as unpaid internships were the focal point in a wave of class action lawsuits. The litigation arose primarily within the New York media sector, most notably, a 2015 decision involving Fox Searchlight Pictures. The U.S. Court of Appeals for the Second Circuit (which covers New York) adopted a “primary beneficiary” standard for resolving the “trainee” or “employee” question, says Milam. “Under this approach, an intern’s status turns largely on which party—intern or company—is the ‘primary beneficiary’ of the internship.”

To help employers and interns figure this all out, the courts and the FLSA have developed a seven-factor test that requires consideration of the following:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

To summarize the above, it simply means that an intern must be getting more benefits from their work than the employer is getting, and that the internship is structured so that it relates to the intern’s education. It should also have a limited period, and the intern should understand that there is no compensation and no paid job is guaranteed after the internship ends.

What you should know before you apply for an internship

When looking for an internship that doesn’t offer pay, you want to be sure that you’ll actually be getting something out of it. Ask the organization if it supports submission of a summary of the work for education credit, suggests Bischoff. “This question will get at the heart of whether the work should be unpaid or not.”

You also want to look for signs that the company has a formal internship program in conjunction with local colleges and universities, adds Milam. “Ideally, the intern will earn college credit for the internship and the university will partner with the organization to reflect that the internship is primarily academic in nature,” she says.

That also means you should have a clear start date and end date that corresponds to your school semester or summer break—not to the company’s operational calendar or productivity needs.

What crosses the line?

If your supervisor asks you to grab them a coffee on the way in or expects you to take notes in a meeting, you don't automatically have grounds for a lawsuit, says Milam. “An intern can perform productive work that benefits the organization while simultaneously gaining hands-on training and developing professional skills,” she says. And, yes, that means you might have to do the occasional grunt work, just as a mid-level professional might need to do on occasion as part of their job.

You’ll know if an organization crosses the line, however, when you’re spending your entire day working on menial tasks that provide little exposure to the industry or profession for which you’re preparing, says Milam. “Assigning exclusively low-level tasks, such as reconciling purchase orders, taking lunch orders, answering phones, organizing files, making copies, and running errands, provides no educational value to the intern, and these are typically duties a paid staffer would take on,” she says.

What can you do if you feel duped?

If you’re a couple of weeks into your internship and you don’t feel like you’re learning anything of value, you can start by sitting down with your supervisor to voice your concerns. You might try saying that you have to report what you’re learning to your academic advisor and so far you don’t have anything of substance to report.

From there, if you get pushback, contact the HR person at the organization, suggests Bischoff. “HR should be able to help determine if there’s a problem and try to remedy it as errors in classifying an intern create significant liability for an organization,” she says. And, considering that it’s part of HR’s job is to minimize that kind of exposure, there’s a good chance that your concerns will be heard.

As a last resort, you can try asking your academic advisor to intervene, or call the Department of Labor for guidance.

Prepare for your future

Unpaid internships are bogus, and it's unfortunately up to you to take action against them. Yes, it may be uncomfortable to confront your manager, but your time is just as valuable as their own. Internships are meant to teach you the ropes. Could you use some help learning more about workplace culture and politics? Join Monster for free today. As a member, you'll get career advice and job search tips sent directly to your inbox so you know how to handle tricky situations that will inevitably arise. 

Legal disclaimer: This information is not intended to constitute legal advice and should not be relied upon in lieu of consultation with appropriate legal advisors in your own jurisdiction.