Taking an internship is often the first step in building a career. It’s a great way to gain real-world experience, apply classroom knowledge, and build your professional network. However, while many internships offer pay, some organizations provide unpaid internships.
If you’re considering one, this guide will help you understand the legalities, benefits, and potential drawbacks so you can make an informed decision.
Are Unpaid Internships Legal? The “Primary Beneficiary” Test
The legality of unpaid internships in the U.S. is a critical topic governed by the Fair Labor Standards Act (FLSA). This law requires that employees in for-profit companies be paid at least the minimum wage. However, interns are not always considered “employees” under the law if the internship is designed to primarily benefit the intern rather than the employer.
The U.S. Department of Labor uses a test called the “Primary Beneficiary Test” to determine if an unpaid internship is legal. This flexible test looks at the overall situation, not just one single factor. The key question is: “Who benefits most from this internship?” If the intern is the primary beneficiary, the internship can legally be unpaid.
Here are the seven factors the courts and the Department of Labor consider:
- Clear Understanding of No Compensation: Both the intern and the employer must agree from the start that there is no expectation of pay.
- Educational Training: The internship must provide training that is similar to what would be given in a classroom or educational setting.
- Tied to Formal Education: The internship should be connected to the intern’s academic program, such as through integrated coursework or for academic credit.
- Accommodates Academic Schedule: The internship must work around the intern’s school schedule and be for a limited duration, often corresponding with an academic term.
- Focus on Learning: The internship’s duration should be limited to the time needed to provide beneficial learning for the intern. It shouldn’t just be a long-term source of free labor.
- Complements, Not Displaces, Employees: The intern’s work should assist paid employees, not replace them. The employer should not receive an immediate, direct benefit from the intern’s work.
- No Guaranteed Job: There should be no understanding that the internship will lead to a paid job at the end.
Real-World Cases That Defined Unpaid Internships
A few landmark legal cases have shaped how courts interpret the legality of unpaid internships:
- Glatt vs. Fox Searchlight Pictures (2015): This well-known case involved interns on the film Black Swan. The court ruled that the interns were performing duties similar to paid employees and that the internships were illegal because the interns were not the primary beneficiaries. This case was key in shifting the legal standard to the current “Primary Beneficiary Test.”
- Schumann vs. Collier Anesthesia (2015): In contrast, the court in this case found that student nurses in a clinical program were the primary beneficiaries of their unpaid internship because the experience was a necessary part of their formal education and certification process. This made the unpaid internship legal.
Is an Unpaid Internship Worth It? A Look at the Pros and Cons
Deciding whether to take an unpaid internship is a personal choice that depends on your financial situation and career goals. While the lack of pay is a major drawback, there are some significant benefits.
| Potential Benefits | Potential Drawbacks |
| Career Exploration – It’s a low-risk way to explore a new career field before committing to a full-time job. | Financial Strain – The most obvious downside is the lack of income, which can make it difficult to afford living expenses like rent, food, and transportation. |
| Skill Development – You’ll gain valuable technical and soft skills (like communication and teamwork) that are highly attractive to future employers. | Potential for Exploitation – Some internships might not be educational and could just use you for menial tasks, providing little to no real learning experience. |
| Enhanced Résumé – Having practical work experience on your résumé can make you more competitive in the job market, even if the internship was unpaid. | Socioeconomic Inequality – Unpaid internships can create an unfair advantage for students from higher-income families who can afford to work for free. |
| Networking Opportunities – You’ll build connections with professionals in your industry who could become mentors or provide future job referrals. | No Employee Benefits – You won’t receive typical employee benefits like health insurance, paid time off, or retirement plans. |
Your Rights as an Unpaid Intern: What You’re Entitled To
Even without a salary, you have rights as an unpaid intern. It’s important to know these rights to ensure a safe and productive experience. Your employer is responsible for providing:
- A Safe Work Environment: The employer must comply with OSHA regulations to ensure a safe and healthy workplace.
- An Educational Focus: The internship must prioritize your learning and professional development, not just the employer’s operational needs.
- Fair Treatment: You are protected from discrimination and harassment under laws like Title VII of the Civil Rights Act and the Americans with Disabilities Act (ADA).
- Access to Resources and Mentorship: You should receive the tools, supervision, and guidance necessary to get the most out of your experience.
How to Find and Afford an Unpaid Internship
If you’ve decided an unpaid internship is right for you, here are some tips for finding one and preparing financially.
How to Find Unpaid Internship Opportunities
- College Career Portals: Check with your school’s career services department, as they often have exclusive listings and relationships with employers.
- Job Boards: Websites like LinkedIn, Glassdoor, and Indeed often list internship openings. You can use filters to search for specific industries or roles.
- Networking: Reach out to professionals in your desired field on LinkedIn. Informational interviews can lead to unadvertised opportunities.
- Direct Contact: Look up companies you admire and contact their HR department or a hiring manager directly to inquire about internship possibilities.
How to Financially Prepare for an Unpaid Internship
Since you won’t be earning a salary, it’s crucial to plan ahead.
- Budgeting: Create a detailed budget that accounts for all your living expenses, including rent, food, and transportation. Look for ways to cut costs, like meal prepping or using public transit.
- Alternative Income: Consider a part-time job, freelance work, or side gigs outside of your internship hours to cover your expenses.
- Financial Assistance: Research grants, scholarships, or stipends offered by your university or external organizations specifically for students doing unpaid internships.
- Negotiate Expenses: It’s a good idea to ask your potential employer if they offer to reimburse expenses like travel or meals. Some companies are willing to help with these costs even if they can’t offer a salary.