To Pay or Not to Pay? The Test for the Unpaid Intern

by Nexsen Pruet, PLLC

As the end of another academic year approaches, college students across the country are seeking summer employment opportunities.  As a result, your organization may soon be faced with the question of whether to hire summer interns.  Sure, you could use the extra hands to help out – but do you really have to pay them?  After all, the company would be providing an invaluable learning experience and on-the-job training to high school and college students, while receiving little back in “corporate gains.”  But before you start employing “free” labor, it is important to understand what the U.S. Department of Labor (DOL) has to say about for-profit employers paying their interns.

In 2010, the DOL issued guidelines concerning unpaid internships.  Based on the test set forth by the department, an intern will be considered an “employee” for purposes of wage and hour laws – including minimum wage and overtime pay requirements – unless these six criteria are met:

  1. The internship is similar to training that 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 receives 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 internship.

Each of the above criteria must be met to exclude an intern from the definition of an “employee” for purposes of the Fair Labor Standards Act (FLSA).  Failure to properly classify and pay an intern could result in dire consequences for the hiring employer.  An intern not properly paid according to the DOL’s guidelines may bring an action against his or her employer and be awarded back wages and overtime pay (which could be doubled) along with attorneys’ fees.

In fact, actions brought by former unpaid interns are becoming more common.  Since September 2011, at least three high-profile class-action lawsuits have been filed on behalf of unpaid interns alleging wage and hour violations against Fox Searchlight Pictures, Inc., the Hearst Corp., and Charlie Rose, Inc. 

The DOL’s 2010 guidelines specifically apply to “for-profit” employers, and it has not yet issued any guidelines on unpaid interns in the public or non-profit sector.  However, the department noted in the 2010 guidelines that unpaid internships in the public and non-profit sectors are generally permissible where the intern volunteers without the expec- tation of pay.

The FLSA provides a special exception for individuals who volunteer time to religious, charitable, civic or humanitarian purposes.  Such individuals may give their time freely without compensation.  When determining whether a volunteer is exempt from the FLSA, the DOL considers the following:

  • The nature of the entity receiving the services;
  • Whether the activity is less than a full-time occupation;
  • Whether regular employees are displaced;
  • Whether the services are offered freely; and,
  • Whether the work is typically associated with volunteer work

The DOL makes the important distinction that individuals volunteering in a non-profit commercial setting that serves the public (i.e., restaurants or retail stores) are not exempt from the FLSA.   

Given the DOL’s interest in this issue and the rising number of lawsuits being brought by interns, it would be wise to have any unpaid internship program reviewed for compliance, regardless of whether your organization is for-profit or non-profit.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Nexsen Pruet, PLLC | Attorney Advertising

Written by:

Nexsen Pruet, PLLC

Nexsen Pruet, PLLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.