Internships can provide many mutual benefits – the student gets to work and learn in a real-world environment, and the employer gets low-cost (or free) labor. But before you make the business decision to hire an intern, be aware of the legalities that are involved. Here are a few tips to help you and your business stay in-line with the Department of Labor.

Before you hire an intern, reach out to your local community college or university and speak with the career services department. They are a great resource for setting up internships and helping you make sure you comply with the rules related to interns. If they are unable to help you, then you need to do some homework before you start advertising your internship. First, you need to create the framework of the position that you will be hiring for, including qualifications required, anticipated duties and time frame of the internship. Once you have set these parameters, then you will want to create some documents that clearly spell out the details of the internship; be sure to allow a space for both you and the intern to sign the agreement. An attorney can help you and oversee the process of creating these documents, including the preparation of an internship manual. Proper legal documents will give you and the intern clear answers, direction and expectations during the internship period.

You may have been warned by others not to hire interns because it is illegal. It’s not. It just so happens that the Department of Labor has begun cracking down on businesses, both large and small, for their improper use of student interns.  The general rule is that a private, for-profit business cannot “employ” an unpaid intern. There are six distinct criteria (or “rules”) that the business and the intern must meet in order for the internship to be considered valid.

  1. The first and most often violated rule is that the intern does not displace regular employees, but works under close supervision of existing staff. For example, if you are a marketing company that is stretched thin and are debating whether to hire another account coordinator or to bring on an intern, it is probably best that you hire the account coordinator.
  2. Tied directly to this first rule is the second:The employer that is providing the training derives no immediate advantage from the activities of the intern; and on occasion its operation may actually be impeded. Unfortunately, this is as straightforward as it sounds.
  3. The internship experience is for the benefit of the intern. At this point, you are probably thinking there is no way that you can benefit from an unpaid intern and that all of the rules are overwhelming; don’t throw in the towel just yet. Here is an example of work that would follow the first three rules. We will use a marketing firm as our example company:

Amy is brought on as an intern and is assigned to work with Rebecca, the senior account executive. Rebecca gave Amy the information about one of her top accounts and explains that, together, they are going to prepare the marketing strategy for that account. In the past, Rebecca has always done these presentations by herself. This time she will guide Amy through the process, teaching her how and why she takes each step she does in preparing the presentation. During the process, Amy is allowed to come up with the great idea that could ultimately change the account forever, which doesn’t violate any of the first three rules.

  1. 4.     The intern understands that they are not entitled to wages for the time spent in the internship.
  2. 5.     The intern is not necessarily entitled to a job at the conclusion of the internship.

These rules are much easier to follow and state that you must be upfront with your intern. Explain to the intern that the internship is not a promise of future employment and that they are not getting paid for their work. Depending on their school’s policy, they may be able to receive credit, but there is no compensation. This leads to the final rule.

6.  The internship, even though it occurs in the facilities of the employer, needs to be similar to training that would be given in an educational environment. This states that the intern’s job cannot be getting coffee, making copies and filing; you must make their time with your company educational. The training you are providing should be training that the intern can take and apply to any other company within the same industry, and the broader the education and experience you provide, the better.

In summary, if you are not sure whether or not your company can properly administer an unpaid internship program, it is best to reach out to either a local university or an attorney that works in labor law. The attorney specializing in labor law can review your internship plans and ensure that you are following the Department of Labor guidelines to keep you, your company and the intern out of trouble.


Brent Kleinman, managing attorney at Kleinman Law Firm, is an active member of the Maricopa County Bar Association and American Bar Association. Kleinman Law Firm is a Valley-based business law firm that specializes in hospitality law, real estate law and criminal defense, including DUI expertise. For more information on Kleinman Law Firm, please visit or call 602-354-4809.