Is my Internship Legal?

By Jake

A staple of the entertainment industry (and non-profit organizations generally) for the last several decades, the unpaid internship was recently litigated in numerous lawsuits and found to be, in many cases, illegal. This has led to some measure of confusion as to what is, and is not, allowed with respect to interns. Do we have to pay them all? Is my unpaid internship illegal? The answers are, of course murkier than one would like.

It should be noted at this point that I Am Not A Lawyer. The following advice is meant to be a starting point. If you have serious legal concerns about your internship, please use the resources included at the conclusion of this article to find proper legal advice.

(Side note regarding interns and work classification: interns are almost always employees and not contractors. For more information on classification, see our article Worker Classification Defined).

Yes, there is such a beast as a legal unpaid internship. The federal Fair Labor Standards Act sets forth the regulations of these internships. These rules are sometimes bent by employers who are looking to get some really cheap labor. Like, really cheap. These types of internships are generally not allowed by the FLSA. How can one tell the difference? Well, there is a 7-part “primary beneficiary” test you can apply to any internship. A court will use these points based on an analysis of each program’s unique circumstances to determine if the intern should be considered an employee with rights to minimum wage and overtime. The idea is to determine who is the primary beneficiary of the internship. If the primary beneficiary is the intern, then they can be unpaid; if the employer, then the intern must be considered an employee and is subject to minimum wage laws. 

To determine the primary beneficiary, the court will consider the extent to which:

1. Both parties understand that the intern is not entitled to compensation.

Basically, this means that an unpaid internship needs to be upfront about the fact that it’s unpaid. It’s a bit sad this needs to be set forth in regulation, since this sort of bait-and-switch is generally regarded as a crap move, but it does happen. If you were promised a stipend for your internship and then it suddenly disappears, that could be a case for the internship to be declared illegal. It is at this point a good idea to remind you that contracts are your friends. Insist on getting the terms of any employment arrangement in writing. In some cases, it may be permissible to provide an unpaid intern with a stipend. The stipend would also only be allowed to reimburse actual expenses (travel, housing, food), and not be “payment for work performed.” That would make it a paid internship, and the internship would then be subject to minimum wage and overtime laws.

2. The internship provides training that would be given in an educational environment. 

So, you are allowed to do the work of the organization: you can file and organize, you can coordinate with other employees and artists, and you can operate performances of productions. However, this has to be seen as training that is similar to what you might find in an educational program. This is typically going to mean lots of direct supervision. You can run a followspot, but there should be somebody with you providing continuous training. An unpaid intern should not regularly perform the routine work of the organization and the organization must not depend on the intern to perform any work.

Which is to say, “not for the direct benefit of the employer.” The internship should be about what it can do for you; what kind of experience and training do you get? Any benefit to the organization, whether direct or indirect, should not be a consideration in the development of the internship program. “We’ll train you to run the followspot because that would be a good thing for you to learn how to do, not because we in any way need you to run it.”

3. The intern’s completion of the program entitles them to academic credit.

If you get academic credit from your internship, that’s a big plus in the right direction, though it should be noted that these are not hard and fast requirements. A program could be perfectly legal but not provide any college credit, and programs that provide college credit could still be woefully illegal.

4. The internship corresponds to the academic calendar.

Again, it’s a lot easier to make your case that your unpaid internship training program is legal if you also follow standard academic calendars. An internship that starts in July and runs to February might raise some eyebrows.

5. The internship’s duration is limited to the period when the internship educates the intern.

It should have a beginning, middle, and end. And it should not include work that is outside of the training program. So, you can’t run the followspot for the next show if that’s after the end of the program. I mean, you can… but they would have to pay you to do so.

6. The intern’s work complements rather than displaces the work of paid employees while providing significant educational benefits.  

“We don’t need to hire a followspot operator for this show; we can have one of the interns do it.” This kind of reasoning should have a red circle with a line through it. Rather, it should be more like, “hey, since we are hiring a professional followspot operator for this show, let us also have them provide some training to the intern, whom they will directly supervise, as a feature of the internship training.” Thumbs up! 

It should also be noted that this would apply equally to employees on payroll as well as independent contractors. In other words, no replacing the assistant lighting designer with an intern. 

7. The intern and the employer understand that the internship is conducted without entitlement to a paid job at the internship’s end.

This can’t be an extended job interview. Does this mean you can’t be hired after an internship? No, if you are qualified for the gig and it’s available, your internship would be seen as advantageous experience. But this can’t be a situation where, “we have 3 positions available at the conclusion of this internship program. The three highest performing interns will be considered to fill those roles.”  Nope – can’t do that.

The big takeaway with these regulations is that an unpaid internship should be viewed as training, and any organization that develops an unpaid internship program, does so to fulfill a mission of educating the next generation, not to in any way get some cheap labor. Programs that partner with formal education programs, and thus allow participants to gain credits through the internship are definitely on the right track, but again, that’s not strictly required.

What to Do if You Think Your Internship is Illegal

You can file a complaint with the Department of Labor:
https://www.dol.gov/whd/howtofilecomplaint.htm

You can seek the advice of a labor lawyer:
https://attorneys.superlawyers.com/employment-and-labor/minnesota/minneapolis/

https://www.justia.com/lawyers/employment-law/minnesota/minneapolis/legal-aid-and-pro-bono-services

For more information:
https://www.dol.gov/whd/regs/compliance/whdfs71.pdf

https://www.dol.gov/whd/#

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