Calling Someone an Intern Doesn’t Make Them Unpaid.

That assumption is costing employers.

Every summer, employers bring on unpaid interns and assume they’re in the clear. They’re not. The Fair Labor Standards Act (FLSA) requires for-profit employers to pay employees for their work — and your interns may qualify as employees, regardless of what you call them.

Titles alone do not determine FLSA compliance.

The Test That Matters: Who Benefits?

Courts apply the primary beneficiary test to determine whether an intern is actually an employee under the FLSA. The question is simple: who is this arrangement really serving — the intern or the employer?

Factors that weigh in favor of a legitimate unpaid internship:

• The intern receives training similar to an educational environment
• The experience integrates with coursework or qualifies for academic credit
• The internship is limited in duration and tied to the academic calendar
• The intern has no expectation of compensation

Red Flags That Create Real Risk

These are the patterns that get employers in trouble:

• Interns filling roles that paid employees previously held
• Interns doing productive work that primarily benefits the business
• No educational structure, mentorship, or meaningful supervision

If any of these sound familiar, you may already have a wage and hour problem.

Misclassification Is Expensive.

Getting this wrong exposes employers to unpaid wage claims, overtime liability, damages, and attorneys’ fees. And these claims are not hypothetical — they’re happening.

What to Do Before You Hire

Take these steps now — before a claim lands on your desk:

• Review your internship programs to confirm they are education-focused, not production-focused
• Verify interns are not backfilling paid employee roles
• Audit your wage and hour practices — especially with staffing agency relationships
• Check state-specific requirements — state law can be stricter than federal

Questions? We can help.

We field workplace law questions all day, every day. We offer fixed-fee services to audit your wage and hour practices before they become costly claims. Contact us.