Are Internships Paid?

Internships can be paid or unpaid, depending on the company, industry, and location. Paid internships provide hourly wages or stipends, while unpaid internships offer experience or academic credit. U.S. labor laws require for-profit companies to meet specific criteria for unpaid internships.

These days, internships are all but required to launch a successful career. The reality is that many employers prefer job candidates who have experience under their belt before they graduate from college.

Of course, you probably know this, which is why you’ve been busy searching for internships that will give you the professional experience you need to land your first job after graduation. But while browsing internship listings, you may have come across a few that said they were “unpaid.”

Um, say what now? Are unpaid internships even legal?

Well, it can be a little complicated. Read on to learn more about paid vs. unpaid internships, along with the benefits and drawbacks of both.

Do Interns Get Paid? Not Always.

First, some good news: The majority of internships offer some form of compensation, whether it’s an hourly wage, academic credit, or stipends to help cover living costs. In fact, due to U.S. Department of Labor (DOL) laws, it can be pretty difficult for companies to get away with offering their interns zero compensation.

Difficult, yes. But, unfortunately, not impossible.

Under the Fair Labor Standards Act (FLSA), employees must be paid at least minimum wage for their work. The only problem? Interns aren’t considered employees under the FLSA.

That means that, yes, unpaid internships are legal, so long as the intern is the “primary beneficiary” of the agreement. This is determined by the DOL’s “Primary Beneficiary Test,” a seven-factor test that takes into account things like the duration of the internship. For example, externships — which typically only last a few days — are generally more likely to be unpaid opportunities due to their shorter duration.

Related: Externship vs. Internship

When it comes to summer internships for high school students, the legal waters are even more muddied. If you’re under the age of 18, employers must be extra careful not to violate Child Labor Rules.

Are Unpaid Internships Bad?

OK, so asking this question is a lot like asking people how they felt about the final season of Game of Thrones. Depending on who you ask, you could get some surprisingly strong opinions on the topic.

The best internships — whether paid or unpaid — are win-win for both the intern and the employer. You, the intern, get to gain valuable work experience that can potentially help you map out a successful career path, while the employer gets to build a talent pipeline and scale their company with entry-level talent.

However, there are a few important differences between paid vs. unpaid internships that you should know about before you accept an internship.

Flexibility – One surprising perk of unpaid internships is that they tend to be more flexible in terms of your schedule. Employers who offer unpaid internships are generally more likely to work around your school schedule, which can be mega helpful for busy college students. Paid internships, on the other hand, are more likely to require students to keep fixed hours. One exception is paid remote internships, which may offer a little more flexibility.

Competition – Unpaid internships are easier to get for one obvious reason: they have less competition. (Broke students want to get paid — go figure.) While earning some dough for college is nice, you might want to take an unpaid internship if you’re struggling to land your dream internship. According to the National Bureau of Economic Research, employers are more likely to accept internship applicants with prior internship experience.
Job Prospects – If you’re secretly hoping that your internship turns into a full-time position within the company, you might be better off
accepting a paid internship. According to a NACE Foundation report, employers are more likely to convert paid interns to full-time employees.
Motivation – Money isn’t everything, true. But let’s be real, it’s a pretty big deal! Paid internships are especially important to students who need to save money for higher education. Getting paid for your internship — along with racking up college scholarships – can greatly reduce the burden of paying for your degree.

Finding the Right Internship Opportunity Is Key

Are unpaid internships worth it? We can’t say for certain because, frankly, it depends on the particular needs of the student and the opportunity in question. If you’re in high school and need to step up your resume game, accepting an unpaid internship could give you a major edge in the competition for paid internship opportunities later. Think it over carefully, consider your career path, and accept the offer that makes the most sense for you. See all our guides on internships.

Popular Questions

Below are common questions we get asked about this topic.

How do unpaid internships affect an intern’s academic responsibilities?

Unpaid internships require interns to juggle their academic responsibilities with their internship. This can be tricky if the unpaid internship program requires a big time commitment. Interns need to make sure their internship experience complements their academic environment without compromising their grades.

What are the legal implications of unpaid internships with minimum wage laws?

In many places, unpaid internships are only legal in very limited circumstances, usually when the intern is the main beneficiary of the experience. If an unpaid intern is doing tasks that benefit the employer more than themselves, they may be entitled to back pay under minimum wage laws, which raises questions about the legality of unpaid labor in some internship programs.

How do students pay living expenses while doing unpaid internships?

Many students struggle financially when doing unpaid internships as they need to cover living expenses without a salary. To manage this, students may look for part-time paid jobs or apply for scholarships and grants that support those doing unpaid internships.

Some companies also offer stipends or reimbursements for travel or other expenses related to the internship.

What to know when transitioning from an unpaid internship to a paid role?

When transitioning from an unpaid internship to a paid role, interns should focus on showing their value to the employer throughout the internship. Building relationships with their supervisors and showing how their work adds value to the company will increase their chances of getting job offers once the internship ends.

Knowing how to communicate their skills and achievements is key to getting a paid job in entry level work after an unpaid internship.

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