Are Unpaid Interns Against the Law? Overview of FLSA & Free Internships


What Requirements Must Be Met to Qualify a Person Under the FMLA?

For-Profit Companies

There are six criteria, according to the Department of Labor, that must be met in order to qualify a person as an intern and exempt a for-profit employer from paying minimum wage. They include:

  1. Actual operation of facilities of an employer is similar
    to training in an educational environment.
  2. Experience is for the benefit of the intern.
  3. The intern does not displace regular employees. (Works under close supervision)
  4. Employer derives no immediate advantage from the activities of the intern.
  5. Intern is not entitled to a job at the conclusion of the “internship”
  6. Employer and the intern understand that the intern is not entitled to wages.

All six of these criteria must be met if an employer is to be exempt from paying minimum wage, according to the Department of Labor. Most commonly, an employer will struggle in the determination of criteria number four (4) regarding immediate advantage.

An employer is not allowed to derive an immediate advantage from the activities of the intern. So what exactly does this mean? The Department of Labor has given some guidance on this question. Providing interns with an opportunity to learn skills that may be used in other employment settings is allowed, however, if the skill is related to a particular employer than the benefit is to the employer. An intern who performs work that is considered “routine” for the business on a regular and recurring basis will fail to meet number 4. This may include distributing mail, answering phone calls, filing, or other routine work. An intern is allowed to perform tasks, which a regular employee performs so long as it has an educational benefit and the performance of the task is supervised by that regular employee. An example may be an intern drafting a letter for a client, which must be reviewed and edited for final send-off. While the intern may have drafted the letter, it will take just as much time for the supervising attorney to review and make the proper corrections. Further, it may take even longer when you account for the feedback the supervising attorney will give to the intern regarding the draft. Ultimately, an employer should ensure that an intern learns how to perform a task to a high level. Once an intern reaches that level, the employer should move them onto a different task as the intern would no longer be benefitting from the experience and the employer will have moved to the stage of deriving an immediate advantage.

Non-Profit Companies

The rules for internship programs in the non-profit sector are the same as those in the For-Profit sector. The major difference is that a non-profit company may have volunteers. The Department of Labor provides the following factors in the determination of a volunteer:

  1. Nature of the entity receiving the services
  2. Compensation of any sort
  3. Expectation of benefits in the future
  4. Whether the activity is less than full time
  5. Whether regular employees are displaced
  6. Whether the services are offered freely
  7. Whether the services are of the kind typically associated with volunteer work

Thus, Non-Profits have two avenues for which to have persons working without compensation. It is particularly important to outline whether a person is an intern or a volunteer when they are hired and to document the program accordingly. A volunteer may receive a “stipend” for their volunteer work, however, anything more than a few hundred dollars may cross the line. Which may draw the attention of the Department of Labor as to the true nature of the program.


When planning an internship program that meets FLSA requirements there are a few solid recommendations. First, create a written Internship Program outlining the activities of the program. This program should include the benefits that the person will be receiving, the progression of activities, and the over-sight of the program and the interns. Second, create a written document that the intern will sign outlining the reasons why the program meets FLSA requirements; as such, they will not be compensated. Third, make sure to review the internship program regularly and communicate with the interns to ensure that the work they are performing does not progress over the line of qualifying as an internship. Quite often, a person may start out as a qualifying intern and progress over the line by performing tasks that no longer create a benefit to the person, but have begun to only benefit the employer.

What are the public policy issues involved?

The debate over internships is one that generally revolves around the compensation of the person. The Department of Labor has avoided the courtroom in almost every enforcement action to date. The reasons for this are obvious, large corporations with deep pockets potentially have a major interest in protecting this unpaid workforce. Further, the Department of Labor does not have the funds to take on these corporations. Regardless of whether a corporation’s internship program is a qualifying program under the FLSA there are other factors which companies may want to consider other than the bottom line. Deciding not to pay interns may result in negative publicity. An intern who is not being paid may be more likely to resent the company and look elsewhere for future employment. It is a major burden for an intern to work for free and attempt to maintain funds to live off which may decrease the morale of the intern during the internship and during future employment due to an increased debt burden. Further a relatively small compensation of minimum wage will relieve the stress of the intern, provide a better public image of the corporation, increase morale, and show a level of compassion in your company that the budding professionals are seeking these days.

Finally, it is important to note that interns receiving college credit are not automatically exempt from the FLSA requirements.

How should a law firm approach internships?

A law firm internship is a valuable tool to a law student and to a law firm. The benefit to the student is obvious, real world experience is immensely valuable to a student who has been studying and learning on a conceptual basis. However, a law firm also has a benefit that does not violate the FLSA internship requirements. A law firm is given the benefit of bringing in potential future attorneys. They will be able to use an internship program to determine who is a good fit for their firm without having to risk any money. Every law firm maintains a different atmosphere and it is important that the new hires are ones who will embrace and thrive within your firm’s atmosphere. An internship program is a great place to evaluate potential candidates for future jobs.

An internship program in a law firm setting should be structured to provide an educational benefit to its participants while ensuring the program is not giving the firm an immediate advantage. As such, a firm is not allowed to charge clients for work performed by interns. Further, generally a firm will spend time training when they could be spending it on bill-able hours. A good internship program will provide training in drafting regular documents and introducing interns to real life situations. Additionally it is recommended that a law firm take on cases and clients that typically would be turned down so that an intern may perform the work in its entirety under the supervision of a lawyer. This hand on experiences will provide the most positive outcome for all parties involved.

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