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The Truth Behind Unpaid Internships

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The Truth Behind Unpaid Internships

By NicoleD
Published: June 10, 2010 Updated: April 23, 2013

Unpaid internships are not illegal, but there are very strict guidelines that employers must adhere to. Even if a student worker receives academic credit for an internship, it does not mean that can they work for free. Read on to learn when an internship can be unpaid and how to stay within the law when employing student workers.

Understanding the law

The basic principle behind a legal unpaid internship is simple - unpaid interns cannot do any work that contributes to a company's operations. This includes any tasks that help you run your business, like documenting inventory, filing papers, answering emails, etc.

So, legally, what can an unpaid intern do? Unpaid interns can shadow other employees and perform duties that don't have a business need. For example, a bakery may allow an apprentice to decorate a tray of cookies that will not be sold to customers. Because the task was only a training exercise for the apprentice and the bakery did not receive any benefit from that work, the bakery would not have to pay that student worker for their time.

Rules for employers - When are unpaid internships legal?

If you're thinking about offering an unpaid internship, the Department of Labor has applied the following guidelines to help you stay within the law. ALL must be met in order for an internship to be unpaid:

  1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school
  2. The training is for the benefit of the trainee
  3. The trainees do not displace regular employees, but work under close observation
  4. The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer's operations may actually be impeded
  5. The trainees are not necessarily entitled to a job at the completion of the training period
  6. The employer and the trainee understand that the trainees are not entitled to wages for the time spent in training

Benefits for employers

Despite the limitations on the duties unpaid interns can perform, many small businesses find them valuable. For employers, an internship allows you to audition potential employees without having to invest in labor or benefits.

However, if you want to hire workers to help offset your workload, you can still offer an internship, but it can't be unpaid. Employers that can afford to offer paid student internships often benefit from the arrangement. The flexibility of internships can free you of long term employment commitments, an especially important factor for seasonal businesses. Paid internships can also help you acquire a specialized skill at a good price - if you need assistance with marketing or setting up a website but can't afford a professional, students looking to boost their resume are often a good bet.

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About the Author:


France is a country where internship has gone far. The present situation is that without one or several internships, a young graduate will not find a job. It means months or even more than a year of very low paid work with real responsibilities. It has become a widespread system that is overused by corporations as low-cost labor. A movement among internships, developed on the Internet, has finally emerged with repeated demonstrations in the street. This is an example how internship can become another way to lower labor costs in the developed economies.
Thanks, Christine. This was good, and very helpful. We were seriously considering setting up an unpaid internship, but given all these rules I'm glad we didn't! On a more political note: It's a bit paradoxical to me, that the govt. both wants to support Small Business (it says undet the current Administration) BUT at the same time expects the SBO to hire someone who 'does not further the operations of the business' Hunh?! I know YOU don't make the rules, Christine :) Good post, nonetheless.
Hi Rheanna, I will follow up with you offline. Thanks for visiting Business.gov.
Hi NicoleD, My name is Rheanna and I am a journalism student at Emerson College. I was hoping you would be able to answer a few questions for me concerning this issue for interns. I am writing a story about internship laws and Emerson students' experiences pertaining to them. The article will be published to our online student news source, JSONS.org. I was not sure how else to contact you, I hope this is alright! Please e-mail me at rheannabellomo@gmail.com. I would very much appreciate your time. Thank you,Rheanna BellomoEmerson 2012Message Edited by NicoleD on 11-17-2009 01:28 PM


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