Are Unpaid Internships Legal in California?

Internships provide students and job hunters a gateway into employment, providing valuable hands-on experience. However, unpaid internships raise serious ethical and legal considerations about fairness and accessibility that require further discussion. There are laws that outline when an internship must be paid or may legally remain unpaid. As an employer or potential employee, knowing the law is critical.

Unpaid Internships are Legal in California

In California, unpaid internships are legal. However, they must adhere to certain regulations that protect interns and align with both state and federal laws. These rules ensure the internship serves primarily as an educational experience rather than simply unpaid labor for an employer.

Employers are required to submit a clear outline of the internship program to the Division of Labor Standards Enforcement (DLSE). This submission ensures alignment with educational objectives and adherence to guidelines that must be met, including:

• The internship must be integral to an educational program, either being part of the school curriculum or something similar.
• Interns are not entitled to employee benefits such as health insurance or workers’ compensation insurance under this arrangement. 
• Training must be tailored to teach skills pertinent to a specific industry.
• Employers must be transparent when searching for the intern that the internship will not include monetary compensation.
• Ultimately, a legal unpaid internship must primarily serve to benefit the intern’s learning and professional development; it should not predominantly benefit the employer or replace regular employee roles.

While unpaid internships are permitted in California, they must meet these stringent legal standards.

Federal Laws Regarding Unpaid Internships

In addition to California law, there are also federal laws that govern unpaid internships. The criteria under federal law is similar to that under California law, but there are some minor variations. To be permitted to hire an unpaid intern under federal law, the intern must be the primary beneficiary of the relationship – meaning it benefits them and not the employer. To make this determination, the following criteria is taken into consideration

• 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.
• The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
• The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
• The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
• The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
• The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
• The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

The test for determining intern classification is intentionally designed to be flexible; no single factor alone will decide an individual’s status as an intern under the Fair Labor Standards Act (FLSA). Instead, the totality of circumstances in each unique case must be carefully considered to establish whether an individual is acting more like a student gaining beneficial experience or performing as a traditional employee would. 

Steps to Take if You Believe an Employer is Violating the Law

If you suspect your employer is not adhering to the legal standards for unpaid internships, taking certain steps can help address the situation. Here are the actions you should take:

Review The Legal Criteria for Unpaid Internships: Familiarize yourself with both state and federal guidelines for such arrangements to clearly understand where violations may be occurring.

Document Everything: Keep a detailed record of all tasks and duties performed during your internship.

Seek Clarification from Employer: Sometimes, misunderstandings about an intern’s role or confusion regarding compliance can be resolved by simply discussing concerns with the employer and requesting a review of the terms

Consult With a Lawyer: If reviewing the guidelines and discussing concerns with your employer does not resolve the matter, seeking legal advice is essential. An employment lawyer in San Diego can guide you through your rights as an intern, evaluate any infringements on these regulations, and advise you on potential action that could be taken.

If you need assistance in addressing potential violations of unpaid internship laws, don’t hesitate to contact us today to schedule a free consultation and take the first step towards protecting your rights.