Are Unpaid Internships Illegal in California?

Internships have become a staple of the higher education experience in America. For many, landing the right internships can help with gaining invaluable experiences to help further your career. But for others, internships — especially unpaid ones, can lead students to wonder whether they’re getting an experience worth their time.

Federal Guidance on Unpaid Internships

The federal government’s Department of Labor has strict rules governing the rights of employees when it comes to what their employers expect of them. But what is the case of interns who are not getting paid for the work they do with a company?

As a whole, the federal government details that an unpaid internship experience should benefit the intern as opposed to benefiting the employer. This can sometimes be difficult to understand as it can often seem that employers are the ones greatly benefiting from the free labor.

In January 2018, the Department of Labor clarified through new guidance who the “primary beneficiary” of an internship would be. These updated guidelines detail seven factors to look for, and they are as follows:

1. The intern and the employer understand that there is no expectation of compensation during the internship.
2. The extent to which the internship provides training that is similar to the experience and training given in a traditional educational environment. This can include hands-on experience and clinical experiences.
3. The extent to which the internship is connected to the intern’s educational program. Often, this is through an experience that will count as class credit.
4. The extent to which the internship is designed around the intern’s educational commitments and academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements the work duties of paid employees while providing significant educational benefits to the intern. The work should not displace paid employees.
7. The extent to which the intern and the employer are in agreement that the internship does not mean that there will be an employment opportunity at the conclusion of the internship.

California Laws and Unpaid Internships

In California, the state has a set of standards similar to those set by the Federal Department of Labor. These state standards are dictated by the Division of Labor Standards Enforcement (DLSE).

If an employer wants to take on an intern, they must first submit an outlined proposal of what the internship will consist of to the DLSE. The proposal must meet the following guidelines in order to be eligible for approval:

• The internship must be an educational experience that is tied to a school or educational institution. This means that the intern must be a participant of that school or institution.
• The intern cannot receive benefits including workers’ compensation, insurance, and other employee benefits.
• The internship must teach the intern how to work in the selected industry as opposed to a specific company.
• Recruiters must be transparent about the internship and must advertise that it is an unpaid experience.

As a whole, an internship should be an experience that benefits the intern as opposed to benefitting the employer. In some instances, it can be acceptable for an employer to lose out on resources and even revenue because they have taken on an intern.

If you are an employer or individual with questions about whether a current or proposed internship is appropriate, an experienced employment law attorney at Coast Employment Law can help you navigate this complex space. Reach out today for a free confidential consultation.

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