Paid vs Unpaid Internships

It is the responsibility of the employer to determine whether an internship should be paid or unpaid, based on labor laws. Employers should be familiar with labor laws in order to determine eligibility based on the organization's specific internship opportunity. For more information about unpaid internships and labor law, please review the U.S. Department of Labor's Employment and Training Guidance Letter.

The following provides insight into unpaid internships and current labor laws, however the College of Education requires all employers to research the topic thoroughly to find the best option for their individual organization.

The U.S. Department of Labor’s Wage and Hour Division (WHD) has developed a six part test for unpaid internships:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern; 
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all of the factors listed above are met, an employment relationship does not exist under the FLSA, and the Act's minimum wage and overtime provisions do not apply to the intern. This exclusion from the definition of employment is necessarily quite narrow because the FLSA's definition of "employ" is very broad.

The information above is an excerpt from the U.S. Department of Labor's "Fact Sheet #71: Internship Programs Under The FLSA"

For additional information, please review the National Association of Colleges and Employers' position statement on unpaid internships.