How to Properly Structure an Unpaid Internship Program

A variation of this put up seemed on my internet site some of the past following the initial wave of unpaid intern lawsuits filed in New York in 2011 and 2012. One of the questions that presented itself as a result of those lawsuits became: What’s the precise check for an unpaid internship? In other words: When is it know not to pay an intern? Luckily, the complaints culminated in a resolution of the problem. With commencement season in complete swing, revisiting the necessities for an unpaid internship is proper.

Unpaid Internship Program

To avoid legal responsibility, businesses ought to comply with federal and state legal guidelines. Separate checks exist for non-income and income. In this submission, we awareness of the requirements of for-profit corporations.

Federal Law Requirements for Unpaid Internships in the Second Circuit

In the Second Circuit, encompassing Connecticut, New York, and Vermont, employers should observe the “number one beneficiary test” while determining whether an intern may be paid or unpaid below the federal Fair Labor Standards Act. The check is nuanced and considers whether the intern or the organization is the number one beneficiary of the relationship.

Under this check, there are seven non-exhaustive elements to recall while assessing whether or not an intern is an employee entitled to repayment beneath the FLSA:

The quantity to which the intern and the organization sincerely remember that there is no expectation of compensation. Any promise of reward, specific or implied, indicates that the intern is a worker—and vice versa.

The extent to which the internship gives schooling that could be similar to that which could be given in academic surroundings includes the scientific and other hands-on education furnished by educational institutions.
The quantity to which the internship is tied to the intern’s formal training application with incorporated coursework or the receipt of instructional credit. The amount to which the internship contains the intern’s instructional commitments by using similar to the instructional calendar.

The extent to which the internship’s period is constrained to the internship’s length provides the intern with beneficial getting to know. The quantity to which the intern’s paintings enhance, rather than displaces, the work of paid employees even as presenting tremendous academic blessings to the intern. The extent to which the intern and the organization understand that the internship is carried out without entitlement to a paid job after the training.

Applying these concerns calls for weighing and balancing all instances; no one thing is dispositive. Although the check makes a specialty of what the intern gets in change for their work, the bill also contains the ability to observe the monetary fact between the intern and the commercial enterprise. Therefore, every element need not factor inside the equal course for that allows you to finish that the intern isn’t a worker entitled to the minimum wage.

New York State Law Requirements for Unpaid Internships

Businesses need to also comply with relevant national laws. New York’s Department of Labor considers the subsequent eleven standards for for-profits:

the schooling, even though it consists of the real operation of the business’s facilities, is much like training furnished in educational software; the education is for the benefit of the intern; the intern no longer displaces normal personnel and works below close supervision; the activities of the interns do not provide an immediate advantage to the business and, every so often, commercial enterprise operations may additionally actually be impeded;
the interns aren’t necessarily entitled to a process after the schooling duration and are loose to take jobs somewhere else in the equal subject; the interns are notified, in writing, that they may no longer acquire any wages and aren’t taken into consideration employees for minimal wage functions;
any scientific training is executed under the supervision and course of individuals knowledgeable and skilled in the activities being achieved; the interns do now not acquire worker advantages, such as coverage or discounted or free goods or offerings from the commercial enterprise; the education supplied to the intern is trendy and qualifies the intern to work in a comparable commercial enterprise, in place of specifically for a job with the enterprise offering the program; the screening system for the internship program isn’t similar to for employment, and entails simplest criteria applicable for admission to an impartial instructional software; and software commercials are couched absolutely in terms of training or education, as opposed to employment (although employers can also imply that certified graduates of this system can be taken into consideration for work).

All eleven criteria ought to be present for an intern to be unpaid.


These are stringent assessments, and, in most cases, New York businesses with interaction interns are probably engaging employees entitled to minimum salary and beyond regular time compensation. For those companies that truly function legitimate unpaid internship packages, those agencies should keep in mind signing due internship agreements to document the scope in their application. On the occasion of assignment, such agreements can prove how the internship program operated in practice.