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Are Unpaid Internships Legal?

unpaid-internshipsMany people in today’s younger generations (born after 1970) have had to work as interns during their careers. Paying jobs have been tough to come by recently, and these unpaid “internship” opportunities supposedly help boost your resume and eventually land you that paying job you are looking for. Occasionally, these internships are offered in exchange for school credit, but more often they’re offered on an unpaid basis. In other words, all you earn in exchange for your labor is “experience.” Considering the popularity of unpaid internships these days, one can’t help but question, are unpaid internships legal?

How Did The Unpaid Internship Phenomenon Begin?

The Department of Labor (DOL) had very strict rules on employment up until 1947 when the US Supreme Court created an employment exemption for, what they called, “trainees.” This was meant to be used to exempt companies from having to pay students whom they wanted to train and educate. The court said these unpaid positions were to be for the benefit of the students and typically in collaboration with the educational institution that provided the students with academic credit.

However, in the past few decades, the US has seen a drastic increase in the abuse in employment law using this trainee exemption to get around the rule of having to pay their interns. Many of the times, these unpaid employment arrangements are actually illegal. 

How Do I Know If My Internship is Legal?

Before discussing the legality of your specific unpaid internship, one thing to keep in mind is that the DOL treats internships in the “for profit” sector differently (e.g. a company such as Coke or Disney) than the “not for profit” sector (e.g. Habitat for Humanity or the AIDS Foundation). The rest of the article will address the “for profit” sector since that is where most of the employment violations occur.

How do you know if your rights were violated by your current or former employer? It’s very simple. The Fair Labor Standards Act (FLSA) created a six-part test to determine whether a worker could fall under the trainee exemption. The courts have concluded that interns are presumed to be employees, and hence must be paid, unless they meet ALL of the following six criteria:

  1. The internship has to mirror training that the intern would receive in a classroom/educational environment;
  2. The internship must be for the benefit of the intern;
  3. The employer must not obtain an immediate benefit from the intern’s activities;
  4. The intern is not guaranteed a job after the internship is completed;
  5. The intern does not replace a regular employee and also works under the close, direct supervision of regular employees;
  6. The intern and employer both explicitly recognize that the intern is not entitled to be paid.

What Can I Do If My Rights Were Violated as an Unpaid Intern?

So after reading this article, you may have come to realize that your rights were violated as an illegal unpaid intern – but what can you do about it?

Firstly, it would be wise to read more about this issue on the Department of Labor website. Next, if you feel as though your rights have been violated and the internship happened recently (e.g. in the last 1-5 years), then consider calling the DOL’s Wage and Hour Division help line at 1-866-487-9243.

It also is wise to consult a lawyer to see if you might have a claim against your former employer. The most common reason that you will not be able to recover from your boss is because you waited too long to file your complaint. Only a lawyer will be able to tell you the answer to that question.

Check out LawKick, a free online service, if you need to find an employment attorney.