Career Planning

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

Did you know there are legal guidelines to determine what is a paid or unpaid internship? Find them below.

Kathryn Knight Randolph

July 29, 2022

Let's Get Legal: Guidelines for Paid or Unpaid Internships
Know your internship compensation rights before your job begins.
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 U.S. Department of Labor has 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 seven standards must be met in order to establish that an intern qualifies to work unpaid:

1. The employer and intern both clearly understand that there is no expectation of compensation. If compensation is implied or promised, the intern is then considered an employee. 2. 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. 3. The internship experience is for the benefit of the intern and their formal education, tying in integrated coursework or receipt of academic credit.
4. The intern does not displace regular employees, but works under close supervision of existing staff; 5. The internship accommodates the interns academic commitments and schedule. 6. The internship is limited to the time period in which the intern is provided with beneficial learning. 7. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship at its conclusion.

(U.S. Department of Labor Wage and Hour Division)

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

Finding Internship Opportunities for Students

As students begin the internship search process, there are a few things to consider. First, an internship should not serve the purpose of providing you with a paycheck. If you need a job that will pay, it may be better to search for a part-time job. An internship, above all, should be a view as a hands-on learning opportunity. While many internships are unpaid, they still provide plenty of value. Future employers love to see internship experiences on resumes. It shows that students are hard-working, dedicated and have real work experience related to the career or field in which they’re applying and interviewing. Even if the internship experience is outside of the career or field the students pursues after graduation, it still provides important work experience that may not be earned with a part-time job. That’s not to say that a part-time job doesn’t look as good as an internship on the resume; it’s just a different experience. Students should also negotiate that internships be counted as some type of academic credit. The internship experience shouldn’t exist outside of your higher education; it should be included. Ask your college advisor whether or not your internship can be counted toward your academic experience, and they will direct you to the person or department you need to contact in order to make this a possibility. If you’re hoping to land a summer internship, the time to start is now. You can find relevant internship opportunities right here on Fastweb. They can also be found by networking with your friends and family, which will require you to ask them about opportunities that they know of. Finally, you can find internships through your college’s Career Center. They have a plethora of opportunities that they can recommend as well as an alumni network to put you in touch with at certain companies. Finally, remote internships are an excellent opportunity for students right now. It gives students the chance to work at some of their favorite companies without having to move cities or find housing. Instead, they can work from the comfort of their home or college campus. Companies have also pivoted at this time to create a remote internship experience that asks students to contribute to important products and projects and provides mentoring relationships. Through these newly evolved internship experiences, students are gaining experience and networking with talented individuals without ever stepping foot in an office. It should also be mentioned here that many companies are considering eliminating office spaces altogether, and these remote internship experiences are preparing students for the future working world. As you take on the internship search, you now know what to look for in an unpaid or paid internship experience. With these standards in hand, you can ask the right questions to determine where your internship falls on the scale and whether or not your potential employer is following the law.

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