Is my internship legal?

In general, if you do any work for a for-profit company, you must be paid at least minimum wage. However, there are some exceptions, including internships.

For an unpaid internship (or an internship that pays a small stipend less than minimum wage) to be legitimate, the intern (not the employer) must be the “primary beneficiary” of the arrangement.

To determine whether the intern is the primary beneficiary, factors taken into consideration are:

1. No expectation of compensation: The intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
2. Training provided: The internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
3. Academic credit provided: The internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. Academic calendar: The internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. Limited time period: The internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. No displacement of paid employees: The intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. No expectation of job placement: The intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

Not all of these are required, but the more that apply, the more likely the unpaid internship is OK under minimum wage laws.

Do non-profit organizations or the government have different rules for unpaid internships?

Yes, the rules of primary beneficiary only apply to for-profit companies. For work done for non-profit organizations or the government, it’s generally OK to have an unpaid internship (or volunteer work) as long as it is clear to both the intern and employer that it will be unpaid.

When did the primary beneficiary rules go into effect?

The “primary beneficiary” standard is a recent update in the law, as of January 2018. The prior standard had been interpreted as that potentially any benefit to the employer was not allowed. Here is a recent LA Times article explaining this.

Do employment laws apply to my internship?

If it is a paid internship, most employment laws will apply. But if it is a legitimate unpaid internship (see above), then most employment laws do not apply, except for discrimination law.

See our Guide to Laws for Employees.

Further Resources

See more at the Department of Labor website.

Guide to Employee Rights in California

Guide to California Laws on Volunteer Workers