Internships in the United States operate under a set of federal rules and regulations that determine whether an intern must be treated as an employee. These rules primarily derive from the Fair Labor Standards Act (FLSA). Additional statutes and regulatory guidance also influence internship arrangements.

This overview compiles information about US federal internship laws to provide neutral insights about the legal aspects of internships under federal law.

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Internships are recognized under federal law, with the Fair Labor Standards Act (FLSA) determining whether an intern qualifies as an employee. Specific rules apply to “for-profit” entities, subjecting qualifying interns to FLSA wage and hour requirements.

According to Department of Labor, for-profit organizations must compensate workers who meet the FLSA definition of “employee.” However, interns and students might fall outside that definition if they do not function as employees under the FLSA’s criteria.

A Supreme Court decision, Walling v. Portland Terminal Co., clarified that certain trainees are not considered employees if they primarily benefit from the training experience.

How Should US Employers Structure Internship Programs?

The Department of Labor highlights a “primary beneficiary test,” which examines whether an intern or employer benefits more from the arrangement. Employers are advised to design internships around educational goals rather than everyday business operations.

Courts apply a “primary beneficiary test” to establish if someone is classified as an employee or an intern under the FLSA. Among the factors examined are whether both parties understand there is no expectation of pay and whether the internship is intentionally limited to the timeframe in which the intern gains valuable learning.

Employers are advised to set up internships so they clearly emphasize educational benefit rather than performing routine business duties.

Key Federal US Internship Laws

Several statutes affect internships, most notably the FLSA for wage standards and the Portal-to-Portal Act for defining work hours. Recordkeeping and safety requirements also apply under various federal regulations.

  • Fair Labor Standards Act (FLSA): Under the FLSA, eligible, nonexempt workers must receive at least the federal minimum wage of $7.25 per hour.
  • Portal-to-Portal Act (29 U.S.C. §§ 251–262): These provisions of Portal-to-Portal Act clarify what types of activities are regarded as compensable working time.
  • Occupational Safety and Health Act (OSHA): OSHA mandates workplace safety standards for most private employers throughout the country.
  • Recordkeeping Regulations: Any employer subject to the FLSA must keep and maintain payroll or similar records (29 C.F.R. § 516.2(a)).
  • Anti-Discrimination Laws: Federal laws, such as Title VII, prohibit discrimination based on protected characteristics (e.g., race, gender, religion).
  • State Laws on Internships: Some states have additional rules on minimum stipends or notice requirements.
  • Documentation: The FLSA does not differentiate between interns and regular workers.  Employers must keep records about the intern (e.g. internship duties, hours, etc.)

State laws can exceed these federal standards, so it is also important to review relevant state regulations.

Can US Employers Have Unpaid Internships?

Offering an internship begins with determining whether the intern will be paid or unpaid. Under the Fair Labor Standards Act (FLSA), most interns in the private sector should be paid at least the federal minimum wage if they meet the criteria specified in the FLSA.

If an intern is found to be the primary beneficiary of the arrangement, that intern is not an employee under the FLSA and need not be paid. Conversely, if an employer substantially benefits from an intern’s work, the intern is likely an employee who must be compensated.

Do US Employers Need to Track Intern Work Time?

Employers must maintain accurate records for any individual deemed an employee. Unpaid interns typically are not subject to these requirements, unless reclassified as employees. Meanwhile, federal minimum wage and overtime rules generally do not apply to volunteers in the public sector or bona fide volunteers in nonprofit environments who do not receive compensation.

If an intern is later considered an employee, the employer may be subject to back wages for failing to document hours and pay accurately.

You can check out US Federal Time Tracking Laws for more info about time tracking.

Do Employers Face Penalties for Breaking Internship Laws in the US?

Although there are no specific penalties for breaking internship laws, general labor law rules and penalties apply. Breaking the FLSA could face civil or criminal consequences. Potential outcomes include back wages, liquidated damages, and additional fines, and in some instances, court injunctions or criminal charges.

There is also federal oversight of labor standards. The Commerce Clause which gives Congress the authority to regulate interstate commerce, and noncompliance may result in federal enforcement.

Legal Cases Related to Breaking Internship Laws in the US

Film Production Company’s Unpaid Internships Challenged in Court

In Glatt v. Fox Searchlight Pictures Inc., unpaid interns working on the film “Black Swan” claimed they were performing regular employee duties and should have been classified as employees under the Fair Labor Standards Act (FLSA). The Second Circuit held that whether interns are employees depends on the “primary beneficiary test,” requiring a flexible analysis of the totality of the circumstances.

Key Lessons from the Case:

  • Courts consider multiple factors to assess whether interns or employers receive the main benefit from an internship.
  • If an intern performs functions indistinguishable from those of paid staff, there is a heightened risk of being deemed an FLSA employee.
  • Flexible, individualized scrutiny replaces strict one-size-fits-all criteria, emphasizing the educational and developmental aspects of the internship.

Magazine Publisher Faced Lawsuit Over Unpaid Internships

In Wang v. Hearst Corporation, former interns working for various Hearst magazines claimed they were not compensated for work that included tasks similar to those of regular employees. The plaintiffs alleged that they were entitled to minimum wage because the internship primarily benefited Hearst rather than providing an educational or training experience.

Hearst Corporation contested the claims and defended its internship program, arguing that these individuals were properly classified as interns. While the court ultimately denied class certification—meaning the interns could not proceed as a group—the case spotlighted the legal scrutiny that unpaid internships can face when interns perform significant day-to-day operations akin to paid staff.

Key Lessons from the Case:

  • Class action requirements can play a central role in litigation over internship misclassification, affecting whether interns can proceed collectively.
  • Employers must ensure that internships are structured for the benefit of the intern to avoid potential FLSA violations.
  • Even where a court does not grant class certification, the core issue remains whether interns effectively serve as employees.