An unpaid internship at a for-profit employer is lawful only where the intern, rather than the employer, is the primary beneficiary. The Department of Labor applies a seven-factor, non-exhaustive test with no single factor decisive, weighing education, academic credit, the academic calendar and whether the intern displaces paid staff. Where the employer is the primary beneficiary, the intern is an employee owed minimum wage and overtime.
The primary beneficiary test
It replaced a rigid six-part checklist and is deliberately flexible. The factors include whether both sides understand there is no expectation of pay, whether training is similar to an educational environment, whether it is tied to a formal program or academic credit, whether it accommodates the academic calendar, whether it is limited to the period of useful learning, whether the intern’s work complements rather than displaces paid employees, and whether either side expects a paid job at the end.
No single factor decides it, which cuts both ways: an employer cannot buy compliance with academic credit alone, and an internship is not automatically unlawful for lacking one element.
The displacement question does most of the work
If the organization would otherwise have paid someone to do this, the intern is likely an employee. Covering a vacancy, staffing a busy period, or doing the same tasks as junior paid staff all point one way.
Non-profits and the public sector
Genuine volunteering for a non-profit or a public agency is treated differently and can be lawful without pay. That does not extend to a for-profit business, and calling a role voluntary does not make it so.
State law can be stricter
Several states apply their own tests, some closer to the old rigid checklist, and the more protective standard governs.
If you think you should have been paid
The claim is for minimum wage and overtime for the hours worked, subject to the ordinary limitation period. Write down the actual tasks, the hours, and whether anyone paid did the same work — that comparison is the heart of it.
Common questions
When is an unpaid internship lawful?
When the intern rather than the employer is the primary beneficiary, judged on seven non-exhaustive factors with none decisive.
Does academic credit make it lawful?
Not on its own. It is one factor among several, and an employer cannot buy compliance with credit alone.
What matters most in practice?
Displacement. If the organization would otherwise pay someone to do the work, the intern is likely an employee.
Are non-profits different?
Genuine volunteering for a non-profit or public agency can be lawful without pay. That does not extend to a for-profit business.
What can I claim if I was misclassified?
Minimum wage and overtime for the hours worked, subject to the usual limitation period.