Are Unpaid Internships Legal in California?
Nick Ferraro | August 26, 2021 | Employment Law
It’s not uncommon for California employers to offer students and recent graduates unpaid internships instead of paid employment opportunities. They may present these internships as beneficial learning opportunities.
However, you may wonder whether it’s legal to offer unpaid internships in California. The answer is “sometimes.” The lawfulness of an unpaid internship depends on a number of factors.
Does an Unpaid Internship in California Pass the “Seven Tests”?
The Fair Labor Standards Act (FLSA) prevents employers from taking advantage of American workers in key ways. The U.S. Department of Labor has cited the FLSA to identify seven factors that courts use to determine who is the “primary beneficiary” of an employer-intern relationship. This can help determine whether an unpaid intern actually qualifies as an employee who deserves to be compensated for their work.
The factors are as follows:
Understanding There is No Expectation of Compensation
There should be no expectation of compensation in an unpaid internship. An intern may be an employee if the employer promises compensation in any non-educational form. This promise may be express or implied.
Courts may examine whether an intern is receiving education and/or training similar to what they would receive via an educational institution when determining if they are an employee or an intern.
Connection to Formal Education
An internship should relate to an intern’s formal education. For example, an internship may provide course credit, or it might involve completing coursework.
Does the length of an internship provide an intern with educational benefits? This is another question a court may ask to discern whether an intern is actually an employee. They might also ask if an internship is too long relative to the educational benefits of the internship.
The Nature of the Work
This can be a complex factor to evaluate. Generally, an intern’s work should provide them with educational benefits. An intern’s work should complement the work of paid employees — not replace it.
The Promise of a Job
An internship can potentially lead to a paid job. However, an internship should not involve the promise of a paid position upon the internship’s completion. An internship may not be legal if the employer promises an intern a job after the expiration of the internship.
Evaluating Whether Your Unpaid Internship is Lawful
Courts tend to consider the seven factors listed above when there are disputes about the legality of an internship.
Ask yourself the following questions if you suspect your internship is unlawful:
- Is my internship providing me with genuine educational benefits?
- Is there a direct relationship between my internship and my formal education?
- Have I been promised a job or any other form of compensation besides education and training?
- Does it seem like I’m performing the type of work an employee should be performing?
- Is my internship long enough to yield educational benefits? Is it longer than it should be relative to the educational benefits it’s providing?
If you have any doubts about whether your internship is legal, contact an employment lawyer. Specifically, find one who handles wage and hour dispute cases. An attorney can review your case and determine if taking legal action is necessary.