Millions of students and recent grads each year take on unpaid internships—but are all of them legal? In an increasingly competitive job market, unpaid internships have become a rite of passage across industries like media, fashion, politics, entertainment, and tech. But behind the promise of “real-world experience” lies a complex legal question: Are these internships lawful—or just a way for companies to get free labor?
At Malk & Pogo Law Group, we’ve seen firsthand how exploitative unpaid labor can sideline workers’ rights, especially in California where labor protections are among the strongest in the nation. In this article, we’ll explore the legal gray areas surrounding unpaid internships, who’s most at risk, and what your rights are if you’ve been taken advantage of.
The Rise of the Unpaid Internship
Unpaid internships surged in popularity during the 2008 recession, and despite legal scrutiny, they’ve remained a staple of early-career life. According to a 2023 report from the National Association of Colleges and Employers (NACE), about 40% of internships in the U.S. are unpaid, disproportionately affecting low-income and minority students.
While internships are often sold as networking goldmines and résumé-builders, many critics argue they’re simply a way for companies to offload entry-level tasks without paying wages.
So—Are Unpaid Internships Legal?
The short answer: it depends.
Under the Fair Labor Standards Act (FLSA), workers must be paid at least minimum wage and overtime unless they fall under a specific exemption. Interns aren’t always considered employees—but companies can’t just label them that way and avoid paying.
The “Primary Beneficiary Test”
The U.S. Department of Labor uses a 7-factor “primary beneficiary test” to determine whether an intern is legally unpaid. This test considers:
- Who benefits most from the relationship—the intern or the employer?
- Whether training is similar to what they’d get in an educational setting.
- Whether the internship is tied to the intern’s formal education program.
- If the internship accommodates the intern’s academic commitments.
- Whether it’s limited to the duration of educational benefit.
- If the intern’s work complements, rather than displaces, paid employees.
- Whether there’s an understanding there’s no entitlement to wages or a job.
If the employer is the primary beneficiary, the intern must be paid. Otherwise, the arrangement may violate federal and state labor laws.
California Labor Laws Add Even More Protection
California has stricter standards than federal law. Under state law, interns must be part of a formal training program that doesn’t replace regular employees. In addition:
- The intern must not displace any employee.
- The employer must not derive an immediate advantage from the intern’s work.
- The internship should be for the intern’s educational benefit, not the employer’s operational gain.
In other words, if you’re doing real work that helps the company make money, and you’re not getting school credit or classroom-style training, you should be getting paid.
When Unpaid Internships Cross the Line
Let’s look at some examples of questionable (and sometimes illegal) unpaid internships:
1. The Hollywood Lawsuits
In a landmark 2011 case, two unpaid interns on the set of Black Swan sued Fox Searchlight Pictures for wage violations. The court initially ruled in their favor, arguing they performed the same duties as paid employees.
2. Conde Nast Controversy
Media giant Condé Nast ended its unpaid internship program in 2013 after a class-action lawsuit accused the company of underpaying interns who worked long hours with no compensation.
3. California Tech Startups
In Silicon Valley, it’s common for startups to rely on unpaid interns in roles like marketing, coding, or admin support. But unless the internship is strictly educational, these roles likely violate state labor law—especially if interns are covering the work of entry-level staff.
Who Is Most Vulnerable?
Unpaid internships often seem like a “foot in the door,” but they disproportionately favor those who can afford to work for free. According to NACE, Black and Hispanic students are less likely to have access to paid internships than their white peers, exacerbating income and opportunity inequality.
And for those pursuing unpaid internships outside formal academic programs, there are often no protections in place at all.
The Ethical and Legal Debate
While some argue that unpaid internships provide experience, others see them as a symptom of labor exploitation masked as opportunity. And the legal system is catching up.
In fact, a 2022 U.S. Government Accountability Office (GAO) report noted that federal oversight of internships remains inconsistent and recommended strengthening labor law enforcement to protect vulnerable young workers.
What Are Your Rights?
If you’re an intern—or were one recently—here’s what you need to know:
You May Be Entitled to Wages If:
- You performed tasks that directly benefited the company.
- Your role resembled that of a regular employee.
- You didn’t receive educational credit or school supervision.
- You weren’t given structured training similar to a classroom setting.
You can file a complaint with:
Or—if you believe you were part of a broader pattern of unpaid or underpaid labor—you may be eligible to join or initiate a class-action lawsuit.
How Malk & Pogo Law Group Can Help
At Malk & Pogo Law Group, we fight for workers who’ve been taken advantage of—especially young, early-career professionals who may not even realize their rights have been violated.
If you worked as an unpaid intern in California and believe your employer used your labor without giving you proper compensation, we’re here to help you:
- Evaluate your claim under state and federal labor laws
- Determine employer liability
- Recover unpaid wages and penalties
- Pursue class-action litigation if multiple interns were affected
We’ve helped clients across various industries—from media and retail to education and tech—stand up to employers who thought they could bypass wage laws by using interns instead of employees.
Interns Deserve More Than Just “Experience”
An internship shouldn’t be a loophole for corporations to get free labor. If you contributed real value, put in real hours, and received little to nothing in return, you may have a valid claim. The law doesn’t just protect traditional employees—it protects interns, too.
Call Malk & Pogo Law Group today at (818)484-5204 to schedule a free consultation.