Let's Get Legal: Guidelines for Paid or Unpaid Internships

Make sure you know your rights as an intern before your internship begins, so that you don’t get taken advantage of and expectations are set from the start.

Elizabeth Hoyt

April 04, 2014

Let's Get Legal: Guidelines for Paid or Unpaid Internships

One of the greatest woes of an internship is that it is, more often than not, unpaid. Interns are often the hardest working employees because they want nothing but experience or, perhaps, opportunities in return for a job well done.

Employers know this and, unfortunately, sometimes take advantage of the situation by keeping interns longer than necessary, making them work for peanuts (or nothing) and have been known to give false promises of future positions without following through.

Certainly this is not the situation for all internship hosts; we’re just referring to the bad eggs here.

Luckily for students everywhere, the White House, in conjunction with the U.S. Department of Labor, have caught on to this schemer’s dream. As a result, they’ve established regulations that control whether or not an internship must be qualified as paid or unpaid.

If an internship qualifies as a paid position, interns legally must be paid the federal minimum wage (at the very least) for the services they provide within the “for-profit” or private sector. They must also be paid overtime. Both regulations fall under the Fair Labor Standards Act (FLSA).

In addition, the U.S. Department of Labor has developed six new criteria that an employer must apply to determine whether an internship legally qualifies to work without compensation.

The following six standards* must be met in order to establish that an intern qualifies to work unpaid:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar 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.

(*U.S. Department of Labor Wage and Hour Division, Fact Sheet #71: Internships Under The Fair Labor Standards Act, April 2010)

Assuming the internship qualifies under all six factors as an unpaid internship, the FLSA does not consider an employment relationship to actually exist. Therefore, the intern no longer qualifies for the minimum wage and overtime requirements, under the law.

Additionally, in 2010, President Obama signed Executive Order 13562, which outlines codes for recruiting and hiring students and recent graduates within the Federal government.

Make sure you know your rights as an intern, so you don’t get taken advantage of.

Also, try to keep all six factors in mind during your internship search. As a result, you can determine where or not your unpaid internship responsibilities will be fair and whether or not to take the opportunity.

Ask thoughtful questions during the interview process such as:

How do interns benefit from the experience of this internship?

What are the expected work hours for interns?

Can you describe the day-to-day tasks expected of an intern?

What type of training or guidance is provided?

Do internships lead to employment at your company?

If you feel you’ve been taken advantage of as an intern or have additional questions regarding your rights, the U.S. Department of Labor’s (DOL) web site lists offices near you, as well as other resources for workers.

Need more help? Here is a list of resources to help get you started:

How to File a Complaint
Resources for Workers
Resources for Employers
DOL Wage and Hour Division (WHD)
WHD Office Locations
Contact Information

Remember, while there are many amazing employers out there with wonderful internship opportunities, there are some employers that are either unaware of the laws or are willing to take advantage of students looking for work experience.

Were you aware of these guidelines before reading this article?

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