Whether you’re in college or graduate school, job hunting, or switching fields later in life, you might have had the following experience. You find an internship at an organization you admire, and the job seems perfect for you. Then you take a second look and find out there’s a catch—the role pays in experience, not cash.
This scenario is common in the nonprofit world where 57 percent of internships are unpaid. But nonprofits aren’t the only ones with these kinds of arrangements in place. The for-profit sector offers plenty of unpaid internships, especially in competitive fields like communications and fashion.
Unpaid internships themselves can be controversial. Supporters think these roles provide invaluable on-the-job training and networking opportunities for passionate workers while opponents think these internships may shut out skilled candidates who can’t afford an unpaid position.
However, internships remain a stepping stone to meaningful work. So, if you get an opportunity for an unpaid internship, should you take it?
The facts about unpaid internships
First of all, are unpaid internships legal?
Both the for-profit sector and the nonprofit sector do allow unpaid internships under certain circumstances. In this post I’ll examine the regulations that apply nationwide; individual states often have stricter rules for organizations to follow.
The for-profit sector
Federal rules regulating internships in the United States use a set of seven guidelines called the "primary beneficiary test" to determine whether someone is an intern or an employee under the Fair Labor Standards Act. In a nutshell, your status as intern or employee is determined by who benefits the most from your work—you or the organization.
A legal unpaid internship meets these criteria:
1. The intern doesn’t expect to be compensated.
2. The intern receives the same training they’d get in an educational environment, including clinical training in certain fields.
3. The intern can earn academic credit for an education program. Note: This guideline varies depending on where you are. Some states like California require interns to receive course credit.
4. The intern’s hours accommodate any academic obligations they have.
5. The intern receives beneficial learning for the duration of the internship.
6. The intern’s work helps but does not displace the work of paid employees. In other words, organizations can’t substitute an unpaid internship for an essential role which would normally be paid.
7. The intern understands they aren’t entitled to a job after the internship ends.
An internship should function more as a training program than as a full-fledged job. Interns may spend time shadowing employees, sitting in on meetings, and lending a hand for important tasks. But if interns are completing tasks that have an essential business function, would customarily be done by a regular employee, and/or are not providing them with a beneficial learning opportunity, they may have crossed over into employee territory.
The nonprofit sector
Nonprofits have more legal wiggle room than for-profit organizations when it comes to unpaid interns. Since many nonprofits rely on volunteers to get the job done, the Fair Labor Standards Act exempts volunteers from minimum wage requirements. The Department of Labor also permits "unpaid internships for public sector and nonprofit charitable organizations."
These exemptions don’t mean nonprofits can always classify unpaid internships as volunteer positions. But in the absence of specific guidelines for the nonprofit sector, each organization evaluates their internship program on an individual basis.
Nonprofits are encouraged to follow the DOL’s primary beneficiary test to determine whether an intern should be compensated as an employee. A nonprofit looks at the nature of the intern’s responsibilities, the educational training the intern receives, and other factors. The National Council of Nonprofits says the choice to describe a position as an internship or volunteer opportunity is “at the discretion of the nonprofit.”
According to Nonprofit Pro, while nonprofits can offer unpaid internships, interns can still bring claims to the FLSA if they feel they’re doing the work of an employee without being paid.
In the next part of this post we’ll discuss how to tell if an unpaid internship is the right move for you.