May I hire a person as an unpaid intern?

The U.S. Department of Labor (DOL) has adopted seven criteria to determine if an individual can be classified as an unpaid intern and not an employee, known as the "primary beneficiary test." This test looks at the "economic reality" of the intern-employer relationship to determine which party is the relationship's primary beneficiary — the employer or the individual. This test has also been applied in California to determine if the workers are subject to California's wage and hour protections.

The seven factors to consider are the extent to which the:

• Intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee — ​and vice versa.
• Internship provides training similar to that given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
• Internship is tied to the intern's formal education program by integrated coursework or the receipt of academic credit.
• Internship accommodates the intern's academic commitments by corresponding to the academic calendar.
• Internship's duration is limited to the period in which the internship provides the intern with beneficial learning.
• Intern's work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
• I​ntern and the employer understand that the internship is conducted without entitlement to a paid job at the internship's conclusion.

"Intern" is a loosely used term, but for an individual to qualify for a non-paid internship, the above criteria must be used in analyzing the position. All factors will be weighed, and no single factor is determinative.

Most "interns​" will be considered employees under state and federal law, and you will need to comply with wage and hour laws, including paying them at least minimum wage. Closely follow the seven-part test used by the federal and state agencies.​

You can find more information in the Interns section of the HR Library. ​​​