Internship Compensation

Internships: Compensation

Career Services strongly encourages employers to pay their interns, regardless of whether interns are earning academic credit for the demonstrated learning associated with their internships.

Rationale

  1. The United States Department of Labor (DOL) has set forth a legal framework compelling for-profit employers to provide minimum wage and overtime provisions to interns except in very rare cases.
  2. Equitable access to internships and their myriad benefits requires that paid internships be available for students who cannot afford to engage in uncompensated internships.
  3. Wages provide compensation for the effort put forth in an internship itself, which cannot be replaced with academic credit attained for the completion of assignments demonstrating learning. Furthermore, students pay tuition for internship credits.

Legal Framework

In 2010, the U.S. Department of Labor's Wage and Hour Division published Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act (FLSA). Fact Sheet #71 states that:

"Internships in the "for-profit" private sector will most often be viewed as employment, unless the test described here relating to trainees is met. Interns in the "for-profit" private sector who qualify as employees rather than trainees typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek."

The test for unpaid interns involves comparing an experience to the six criteria articulated by the DOL. Unless all six criteria are met, interns in for-profit environments are considered employees and should be paid.

The Fact Sheet states that "Exclusion from the definition of employment is necessarily quite narrow because the FLSA's definition of 'employ' is very broad." The fourth criteria seems especially difficult to meet, as most employers hire interns to complete projects or perform job functions important to the organization.

DOL Criteria for Unpaid Interns

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment
  2. The internship experience is for the benefit of the intern
  3. The intern does not displace regular employees, but works under close supervision of existing staff.
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded
  5. The intern is not necessarily entitled to a job at the conclusion of the internship
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship

LEGAL DISCLAIMER - The information presented here should not be considered legal advice. Employers are encouraged to check with their in-house legal team regarding these matters.

Adapted from UW Seattle's Career & Internship Center resources