Are Unpaid Internships Legal (and Are They Worth It)?

Taking an internship is often the first rung on your career ladder. It’s an experience like no other: a chance for you to experience the world of work, put what you’ve learned in college to the test, and make lasting connections while you’re at it.

Competition for the best internships is intense, and to capitalize on the opportunity they present, some organizations offer unpaid internships instead of paid ones. If you’re confronted with this choice and at a crossroads as to whether an unpaid internship is the right option for you, this guide will cover all there is to know about unpaid internships — and help you avoid a bad experience.

Are internships paid?

Whereas most internships in the US are paid, it is typically common for students to land unpaid internships, with around 40% of internships being unpaid. There are some intricacies in this number though: research from NACE showed that unpaid internships are disproportionately offered to women and Black students.

Similarly, the prevalence of unpaid internships coincides with economic conditions: it has been reported that major companies are scaling back paid internships in 2024 due to economic uncertainty, meaning the prevalence of unpaid options might increase indirectly because of this.

Are unpaid internships legal?

Ultimately, unpaid internships are legal in the USA, but they’re subject to means testing, and if the internship doesn’t meet certain criteria, then it should be paid.

Employers are advised to clearly define their internships and ensure they’re governed by written agreements. Students looking to take on any kind of internship should also familiarize themselves with the law.

What the law says

Under the Fair Labor Standards Act (FLSA) of 1938, all employees of a for-profit company must be paid. However, interns are not considered employees by the FLSA. This effectively means that unpaid internships are legal, as long as the intern, not the employer, is the primary beneficiary of the work arrangement.

The US Department of Labor has developed a Primary Beneficiary Test to evaluate internships and ascertain if the economic reality means the intern should be classed as an employee. The seven factors are:

• The extent to which the intern and employer understand the internship will not be paid.
• The extent to which the internship’s training is comparable to that of an educational institution.
• The extent to which the internship is tied into the intern’s academic program (eg: through integrated coursework or academic credit).
• The extent to which the internship accommodates the intern’s academic commitments.
• The extent to which the internship is limited to the period in which the intern receives beneficial learning.
• The extent to which the work complements (rather than displaces) the work of paid employees while providing educational benefits.
• The extent to which the intern understands they’re not entitled to a paid job at the end of the internship.

No single factor of this test is determinative; therefore, the test is seen as a guide rather than prescriptive. This means that some internships are unpaid, others only qualify for minimum wage, and others qualify for full pay.

Nevertheless, the test is designed to limit the reliance of employers on unpaid internships if the work they’re doing is similar to that of paid employees.

State requirements

Because FLSA and DOL guidance on unpaid internships is advisory, students should check for state-specific legislation. California, for example, requires that employers make an internship proposal via the Division of Labor Standards Enforcement before hiring any intern. New York also has supplementary requirements.

Case law

There is precedent for interns to challenge unpaid internships and if they’re ethical. Here are a couple of high-profile cases that highlight the importance of the Primary Beneficiary Test:

• Glatt vs Fox Searchlight Pictures, Inc (2015): Unpaid interns worked on the production of a movie. The court ruled their work was similar to that of regular employees, making the unpaid internship illegal.
• Schumann vs Collier Anesthesia, PA (2015): Student registered nurses argued their clinical work benefited the clinic. The court ruled that the nurses benefited the most from the work, making the unpaid internship legal.

Some considerations

Students considering an internship and wondering whether it should be paid should keep the specifics of US law in mind. You should also consider what you want to get out of the internship, as well as your own expectations.

Is it worth doing an unpaid internship?

Undertaking an unpaid internship can be a difficult decision, where you need to weigh the lack of salary against the experience gained. Nevertheless, these internships do offer several benefits, five of which we will discuss below:

• Affirming career goals: Unpaid internships are a convenient way for you to explore different careers and companies without making too much of a commitment. This means that you can get a solid understanding of what an ideal job or profession looks like for you, helping you avoid time-consuming and costly career changes down the line.
• Development of skills: Unpaid internships can expose you to plenty of soft and technical skills that will contribute to you becoming a well-rounded professional. Many of these skills are transferable, such as communication, resilience, teamwork and decision-making ability. Not only are these skills valuable in many different organizations, but they can also be applied to your college work.
• Enhancing your résumé: Employers love candidates with practical experience, and unpaid internships allow you to gain plenty of this. By taking on such an internship and adding it to your résumé, you create a different dimension to your credentials and show employers that you’re aware of how to work in a professional setting. This will increase your employability and add skills to your résumé.
• Gaining real-world experience: Unpaid internships offer you practical work experience that you cannot always learn at school. They expose you to technical skills, work environments, and day-to-day responsibilities of your chosen field. All these benefits can make you a very competitive candidate when applying for paid jobs.
• Networking opportunities: Unpaid internships are an easy way to build a professional network. These internships allow you to rub shoulders with knowledgeable colleagues and influential leaders. If you do a good job, they can mentor you or recommend you for future job opportunities.

What tasks does an unpaid internship involve?

The core purpose of an unpaid internship is transactional: you work in an organization without compensation but benefit from practical experience, training and the development of skills relevant to your college major.

Like paid internships, unpaid internships offer technical and practical work in a professional workplace, where, like any employee, you’ll work on projects, commit yourself to deadlines and teams, and essentially operate and interact like anyone else. You might also find yourself being selected (or allowed to volunteer for) other projects that are maybe not connected to your day job but still provide valuable learning opportunities.

What are my rights?

While you won’t have the right to certain things, such as a salary and most employee benefits, you will have the right to many other provisions during an unpaid internship. Here are five of the most important rights you will enjoy:

A safe working environment

Unpaid interns are entitled to the same rights as any employee to a safe workplace. Employers are obligated to protect you as per Occupational Safety and Health Act regulations and requirements.

This includes providing you with the correct personal protective equipment, ensuring that your work environment is free from recognized hazards, and conducting risk assessments for your work. You’re entitled to report unsafe working conditions, and employers must consider these reports fully.

An educational focus

Unpaid interns have the right to a learning experience. Therefore, your internship must provide you with training and educational opportunities similar to what you might get in an academic setting. This also means your employer must design your internship to benefit you, not them.

Where an internship is unpaid, the expectation is that you are compensated not with money, but with academic credit. If your internship is part of a school program, then you have the right to receive credit or satisfy educational requirements, whatever has been agreed.

Fair treatment

You have the right to fair treatment and the same ethical protections from illegal workplace discrimination under both federal and state laws. This means you’re covered under such legislation as the anti-discriminatory Title VII of the Civil Rights Act and the Americans with Disabilities Act.

You also have the right to be protected from workplace harassment. If you do find yourself discriminated against or harassed at work, you have the full right to report this to the Equal Employment Opportunity Commission, who will investigate it as per the regular process.

Not to displace a paid employee

Not only must you and the employer have a clear and mutual understanding that the internship is unpaid, but you also have the right not to be used as a replacement for paid staff.

This means your employer must not use your internship to cover the job responsibilities of someone who would normally be paid for doing them. This could include “typical” intern work such as administration, filing or basic customer service. Essentially, the role should primarily be educational and service-oriented without directly benefiting the employer’s bottom line.

Resources, guidance and mentorship

While you’re on your internship, you have the right to use the same resources, tools and materials necessary for you to fulfill your responsibilities, the same as any employee. This includes safety equipment.

You also have the right to receive feedback and supervision. While this doesn’t necessarily mean you’ll have standard performance appraisals, it does mean the employer has to assess your work and provide you with a trainer or mentor to ensure that the internship experience is educational and beneficial to you.

How long does an unpaid internship last?

The duration of unpaid internships varies, but they’re typically a little shorter than paid ones. Most unpaid internships deliberately align to academic semesters or the corresponding summer breaks and usually last from 10 weeks to 3 months; online internships might offer more flexibility.

Nevertheless, some internships might last longer or extend into your academic year, so it’s essential that you clarify the duration with the organization and ask them to specify a clear start and end date. It is your responsibility to ensure that the internship does not interfere with your studies.

FAQs about unpaid internships

If you’re still deciding if an unpaid internship is the right option for you and your studies, then we have prepared a list of three frequently asked questions that might shed a little extra clarity on the realities of unpaid internships.

Q: How can I find an unpaid internship?

Unpaid internships are commonly sourced through college career centers. You can also find these internships through online job boards such as LinkedIn or Glassdoor, career networking events, and industry associations. You can also contact organizations directly to see what they can offer.

Q: How should I financially prepare for an unpaid internship?

Planning ahead is vital when it comes to financially preparing for an unpaid internship. Create a budget for additional expenses, and consider alternative funding options like part-time work. Ask the organization if anything is included, as some internships might offer travel reimbursement at the very least.

Q: Do unpaid internships lead to a paid position?

Although unpaid interns are not legally entitled to a paid job at the end of the internship, many employers view these programs as a trial period, and if you do well, you will be the first one they reach out to for paid opportunities in the future. The experience alone can help you prepare for paid positions in the future.

Final thoughts

If you’re looking forward to an incredibly rewarding internship experience and you’re deciding if an unpaid internship is the way to go, then don’t panic, as you’re not alone.

Ultimately, unpaid internships are legal as long as they fulfill legislative criteria. That said, the criteria are more of a guideline, so do your due diligence, know your rights and research the unpaid internship opportunities presented to you. If you feel it should be paid, then feel free to suggest this.

Unpaid internships are reasonably common and present many benefits for students. They can be a great way into your dream career or a convenient way to make connections in a sought-after organization. Knowing the law behind unpaid internships will ensure you have a positive experience.

Got a question? Let us know in the comments section below.