Are Unpaid Internships Legal in California? 2024

The question “Are unpaid internships legal in California?” is a common question asked by many different students and employers across the state. With changing labor laws and more awareness of workers’ rights, the concept of unpaid internships has become a trending employment topic. By better understanding the legalities and requirements of unpaid internships in California, both employers and interns can help navigate these opportunities compliantly. Consulting an employment attorney in Los Angeles can help employers structure internships appropriately and protect interns’ rights under the law.

Understanding the Legal Framework of Unpaid Internships in California

Both federal and state laws in California are designed to help balance the interests of workers and employers. This is to help ensure that everyone has certain legal rights that protect them from facing unfair and unethical treatment, whether they are working for a company or running an organization themself.

At the federal level, the Fair Labor Standards Act (FLSA) is responsible for setting many laws and programs in place that give workers and employers a framework to respect. Common items the FLSA sets standards for include minimum wage and overtime pay. The rules set by this government body apply to most California workers, including interns; however, if an internship is primarily educational in nature rather than for pay, the rules are less applicable.

In addition to these federal laws, California has its own labor laws set in place to add extra protection for workers and employers. For example, the state’s labor code has various provisions that prevent an unpaid intern from being exploited or subjected to harassment. This is to make sure that the concept of an “unpaid intern” is not leveraged as a loophole to try and avoid paying wages or treat this demographic as free labor with no consequences or rules to follow.

The Primary Beneficiary Test

Under FLSA, a “primary beneficiary test” was created as a guideline to help employers understand what characteristics constitute an unpaid internship. In instances where the employer is considered the primary beneficiary, the intern must be paid just like the regular employees. The employer is considered the primary beneficiary if the details of the internship provide more benefit to the company rather than the intern doing the work.

If an employer wants to create a valid unpaid internship position, they need to ensure the intern gets more benefit from the experience than the employer. Some key factors of the primary beneficiary test include:

Educational value: The internship needs to provide a similar type of “training” experience that a student would also be given in an educational setting. Employers should take the time to design the internship experience in a structured format with clear learning objectives rather than just assigning outstanding tasks that benefit the employer. For example, provide the intern a chance to shadow a data manager rather than forcing them to sit alone and take on data entry tasks.

Integration with academic work: If an internship has direct ties to their education program, this can help to make the experience more beneficial to the intern than the company. For example, an employer would work with their school to issue academic credit or help them fulfill a graduation requirement.

No displacement of regular employees: The intern’s role should not be doing any work that a regular employee would do. These would be mostly tasks that contribute directly to the business operations of that specific employer. Rather, the work should be closely supervised by someone in management or a designated “role model” to offer feedback and ensure the experience prioritizes learning.

Mutual understanding of unpaid status: It must be clear to the intern that the internship is unpaid. They cannot be left with any false hope that this could change during the tenure of the role. It must also be made clear that there is no expectation that they will be offered a full-time role at the end of the internship. Employers are welcome to offer a role if they want to, but it’s not a requirement.

FAQs About California Unpaid Internships Legal or Not

Is It Legal to Not Pay an Intern in California?

Yes, it is perfectly legal to hire an intern without any intention to compensate them for their work. However, this does not give an employer permission to use them as a source of free labor without caring about their experience. The internship must primarily benefit the intern, allowing them to explore different areas of the industry and spend more time learning than performing. If the experience is not educational in nature, the unpaid role could be illegal.

Is Unpaid Training Legal in California?

There are certain conditions where unpaid training could be legal in California, but it mostly applies to unpaid internships. Interns’ training must be similar to what they would experience at an educational institution. It should be focused on educating rather than assigning tasks. Outside of an internship, if training is required for a specific role and education adds value to the employer, the employer must pay employees for this time.

Is It Okay to Do an Unpaid Internship?

Yes, unpaid internships are a perfectly acceptable experience to accept and partake in as long as the employer is following all of the rules and guidelines before hiring the intern. These experiences can provide someone with new industry knowledge, a chance to develop new skills and build a large professional network that they would not be able to achieve on their own. While having a paycheck would be nice, the intangible experiences can be just as valuable.

Do Internships Pay in California?

Internships can be either paid or unpaid in California. It depends on how they are structured. In paid experiences, an intern should expect a pay rate closer to minimum wage. However, an employer is required to add the intern to their payroll if they position the role as something that will benefit them more than the intern. However, some educational internships still pay in an attempt to attract top talent.

Contact Canlas Law Group Today

It can be difficult to learn the complexities of an unpaid internship and the varying labor laws in California. Whether you are a student looking for an internship or an employer who wants to design a compliant unpaid internship, the employment attorneys at Canlas Law Group can help. Contact us today for an initial consultation to better explain your legal needs.

California Unpaid Internships Legal or Not Resources:

• What Are My Rights As A California Employee?
• California Final Paycheck Law
• Workers’ Compensation For Temporary Workers In California
• Who Can Be Excluded From Workers’ Compensation In California?
• What Happens If I Get Fired While On Workers’ Comp In California?