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Do interns get paid? The rule for US employers
In the United States, an intern at a for-profit company has to be paid at least the minimum wage, and overtime, unless the intern rather than the company is the main beneficiary of the internship. The U.S. Department of Labor says courts decide that with a seven-factor "primary beneficiary test".
The federal law behind the answer is the Fair Labor Standards Act. It requires for-profit employers to pay their employees for their work. An intern or a student may not be an employee under that law, and when they are not, the law does not require them to be paid.
So the real question is whether the intern is an employee. The Labor Department's Fact Sheet #71, last updated in January 2018, sets out how courts answer it: they look at the economic reality of the arrangement and ask who benefits most, the intern or the employer.
The seven factors courts weigh
Courts have named seven factors as part of the primary beneficiary test. The more of them point to the internship serving the intern's education, the more likely the intern is not an employee and can go unpaid.
| Factor | What courts look at |
|---|---|
| Pay expected | How clearly the intern and the employer understand there is no expectation of pay. Any promise of pay, said or implied, suggests the intern is an employee. |
| Training | Whether the internship gives training like that of a school, including the hands-on and clinical training schools provide. |
| Link to study | Whether the internship is tied to the intern's formal education through coursework or academic credit. |
| Academic calendar | Whether the internship fits around the intern's studies by following the academic calendar. |
| Length | Whether it lasts only as long as the intern is still learning from it. |
| Work done | Whether the intern's work adds to, rather than replaces, the work of paid staff while giving the intern real educational benefit. |
| Job at the end | Whether both sides understand the internship comes with no right to a paid job when it ends. |
No single factor decides
Courts describe the test as flexible, and none of the seven factors settles the question alone. Whether an intern is an employee depends on the circumstances of each internship.
If those circumstances show the intern is really an employee, the intern is owed both the minimum wage and overtime pay. If they show the intern is not an employee, neither is owed under the federal law.
What a paid intern is owed
The federal minimum wage is $7.25 an hour and has been since July 24, 2009. Many states have their own minimum wage laws, and where a state's law gives workers more, the employer has to meet both.
Unless an employee is exempt, the federal overtime rule also applies: at least time and a half the regular rate of pay for every hour over 40 in a workweek.
Charities and public bodies
The test is about for-profit employers. Unpaid internships at public sector bodies and at non-profit charities, where the intern volunteers without expecting to be paid, are generally allowed.
The Labor Department's Wage and Hour Division answers questions on its help line, 1-866-487-9243, from 8 a.m. to 5 p.m. in the caller's time zone. Its fact sheet is general information and does not have the force of law.
