Unpaid Internships: The Line Between Learning and Labor

With warmer days ahead, many individuals are eager to grow their skills and build their resumes. If you’re planning to bring on summer interns, it’s the perfect time for a quick reality check: are your interns a benefit or burden? This is the question DOL wants you to consider when deciding what role unpaid interns will have.

If your employees sigh with relief when your summer interns show up, you probably should pay those interns! In fact, most interns should be paid for their work contributions, In 2018, DOL issued guidance that states whether interns must be paid depends on who is the primary beneficiary of the employer-intern relationship.

If you are offering an unpaid internship, you should look at all circumstances, and consider the following factors (but note no single factor is determinative):

1. Expectation of Compensation

The intern and employer clearly understand there is no expectation of compensation. Tip: if there is any promise of compensation—make sure it covers minimum wage.

2. Education-Like Training

The internship provides training that is similar to training given in an educational environment, including the clinical and other hands-on training provided by educational institutions. Tip: Assignments like “mopping the floor” are difficult to tie to any educational objective and look more like work that a paid employee should perform.

3. Link Between Duties and Coursework

The internship is tied to the intern’s formal education program by integrated coursework or receipt of academic credit. Tip: You can require that internship applicants be enrolled in an educational program, even if the intern does not receive formal academic credit for the internship.

4. Accommodating Coursework

The internship accommodates the intern’s academic commitments by corresponding to the academic calendar. Tip: Work with your intern(s) up front to avoid overlapping with their semester and/or finals.

5. Limited Duration

The internship’s duration is limited to the period the internship provides the intern with beneficial learning. Tip: Set a clear start and end date in writing at the beginning of the internship.

6. Does Not Displace Paid Employee Work

The intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern. Red flag: If you would otherwise need to hire someone to do the work, the intern probably needs to be paid.

7. Acknowledging Employment is Not Guaranteed

The intern and the employer understand the internship does not guarantee a paid job at the conclusion of the internship. Tip: Make this expectation clear at the start of the internship—and stick to it.

What should employers do before creating an internship program?

Every intern is going to differ based on their respective coursework and request to perform certain duties, but employers can decide beforehand if accommodating unpaid interns is possible in their workplace. If an unpaid internship program is implemented, consider the following:

• Try to match each intern’s coursework or interests with the activities or duties they perform. Preferably, the school will provide an assignment for the intern.
• For a pure learning experience, offer “non-duty” days when interns shadow employees of their choice or travel to a job site to watch employees work.
• Train and advise managers that interns cannot be used to supplement paid employee work.
• Have interns sign an acknowledgment form that the internship is unpaid and there is no guarantee of employment at the end of the relationship.

Remember, you can always pay the intern the applicable minimum wage as an employee. Also, all interns, paid or unpaid, should undergo harassment training and be aware of the company’s reporting procedures.

In summary, unpaid internships often require more from the employer than the intern. Make sure your summer success story doesn't turn into a wage and hour headache. Thoughtful planning, hands-on supervision, and a genuine focus on education are key to keeping the relationship compliant and meaningful.

If you would like to review your internship program or agreements, please contact the authors of this article, your Woods Rogers attorney, or a member of the Labor & Employment team.