Do You Have to Pay for Internships? Laws, Tests, and Red Flags

In most cases, no — you should not have to pay to do an internship, and if you’re working for a for-profit company, the company generally has to pay you at least the federal minimum wage. The Fair Labor Standards Act treats almost anyone performing work for a business as an employee entitled to wages, and the narrow exception that allows a genuinely unpaid internship is a training-focused arrangement where the intern is the primary beneficiary. Separately, some interns do pay fees, but those fees go to third-party placement agencies for administrative help, not to the host employer as a price of working.¹

When a For-Profit Employer Has to Pay You

The FLSA requires for-profit employers to pay employees for their work, and the label on the role doesn’t matter. If the law considers you an employee, the company owes you wages regardless of whether it called you an intern, trainee, or apprentice.¹

The federal minimum wage is $7.25 per hour as of 2026. Many states set higher minimums, and when a state rate is higher, the employer must pay that higher figure.² Overtime rules apply too: an intern classified as an employee is entitled to one and a half times their regular rate for any hours over 40 in a workweek.

The Primary Beneficiary Test

Courts decide whether an intern is really an employee under a framework called the primary beneficiary test. It looks at the economic reality of the relationship and asks who gets more out of it. No single factor controls; a court weighs the whole picture.¹ The Second Circuit formalized the modern version of this test in Glatt v. Fox Searchlight Pictures, a case in which unpaid film-production interns successfully argued they should have been paid.

The Department of Labor identifies seven factors:

Both sides clearly understand there is no expectation of pay. Any promise of compensation, even implied, points toward employment.
The internship provides training similar to what you’d get in a classroom, clinical rotation, or vocational program.
The internship is tied to your formal education through coursework or academic credit.
The schedule accommodates your academic calendar rather than forcing school to take a back seat.
The internship’s length is limited to the period in which it provides genuine learning.
Your work complements rather than displaces paid employees, while giving you meaningful educational benefit.
Both sides understand the internship doesn’t guarantee a paid job at the end.

When the factors tip toward the employer getting more out of the arrangement than the intern, the intern is legally an employee and must be paid. This is where most violations arise. A company can write “unpaid internship” on the offer letter, but if you spend your days doing the same tasks as paid staff with little structured learning, the paperwork will not save the employer.

Does Academic Credit Make It Legal to Not Pay You?

No. Offering academic credit is one factor in the primary beneficiary test, not an exemption from federal wage law.¹ The work itself still has to function primarily as education rather than production labor.

For the credit factor to carry real weight, the internship usually needs to be integrated into your curriculum: a faculty advisor, structured learning objectives, and regular feedback from the employer. If your day is answering phones and making copies, attaching three credits to it doesn’t change the legal analysis. There’s an uncomfortable side effect of this arrangement: students often pay tuition for internship credits, meaning they effectively pay to work. That makes it more important, not less, that the host company isn’t using the intern to replace paid staff. If someone was recently laid off and you inherited their workload, the Department of Labor is likely to see the arrangement as illegal employment no matter how the credits are structured.

Government Agencies and Nonprofits Follow Different Rules

The rules shift when the placement is with a government agency. The FLSA specifically exempts individuals who volunteer for a state, local, or interstate government agency, provided they receive no compensation beyond expenses, reasonable benefits, or a nominal fee, and they aren’t volunteering to do the same work they’re separately employed to do for that agency.³ Regulations confirm that private citizens donating time to public agencies for civic or humanitarian reasons are not employees under the FLSA.⁴

Private nonprofits sit in a murkier space. The volunteer exemption is written around public agencies, and courts and the DOL have generally accepted volunteering for religious, charitable, and humanitarian organizations. But the statutory language is narrower than many nonprofits assume. A private nonprofit that hands an “intern” a detailed schedule, assigns them the same work as paid staff, and exercises real control over how they do it can create an employment relationship that requires wages.

Both nonprofits and government agencies can generally reimburse actual out-of-pocket costs like transportation and meals without turning volunteers into employees. Regular stipends that go beyond covering real expenses start to look like wages, and at that point the analysis shifts.

When Interns Actually Pay: Placement Programs and Warning Signs

Some interns do pay fees, but these usually go to third-party placement companies, not to the employer. Global and abroad-focused programs are the most common example. Fees range from roughly $1,000 for basic remote placements to over $20,000 for longer international programs that bundle housing, visa assistance, and insurance. That money buys administrative services from the intermediary. It does not buy the right to work.

Paying a placement fee doesn’t change whether your host company owes you wages. If you’re placed at a for-profit business and your work primarily benefits it, you’re an employee under the FLSA and entitled to minimum wage and overtime no matter what you paid the agency to get there.

Watch closely for any arrangement where the host employer itself charges you a training fee or requires a payment as a condition of the internship. Federal regulations require wages to be paid “free and clear,” and any kickback that pushes an employee’s effective pay below minimum wage violates the FLSA.⁵ A company that collects money from its own interns while profiting from their labor is stacking two things the law prohibits: unpaid work and wage kickbacks. If a program asks you to write a check to the same company assigning your tasks, treat it as a red flag and investigate before signing.

What to Do If You Should Have Been Paid

If you believe a for-profit employer treated you as an unpaid intern when you legally qualified as an employee, you have two ways to recover wages under federal law: file a complaint with the Department of Labor’s Wage and Hour Division, or bring a private lawsuit.⁶

To file with the DOL, call 1-866-487-9243. Complaints are confidential, and it’s illegal for an employer to retaliate against you for filing one or cooperating with an investigation.⁷ If the investigation finds violations, the agency will seek back wages and can require the employer to fix its practices going forward.

A private lawsuit carries steeper consequences for the employer. The FLSA makes employers liable not only for the unpaid wages but for “an additional equal amount as liquidated damages,” effectively doubling the tab. Courts also must award reasonable attorney’s fees to a successful plaintiff.⁶

Timing matters. You have two years from the date of the violation to file, or three years if the employer’s violation was willful.⁸ The clock runs from each paycheck or pay period, so early violations in a long internship can expire while later ones remain actionable. Don’t wait until the internship ends to figure out whether you should have been paid.

1
U.S. Department of Labor. Fact Sheet 71: Internship Programs Under the Fair Labor Standards Act
2
U.S. Department of Labor. Wages and the Fair Labor Standards Act
3
Office of the Law Revision Counsel. 29 U.S. Code 203 – Definitions
4
eCFR. 29 CFR Part 553 Subpart B – Volunteers
5
eCFR. 29 CFR Part 531 – Wage Payments Under the Fair Labor Standards Act
6
Office of the Law Revision Counsel. 29 U.S. Code 216 – Penalties
7
U.S. Department of Labor. How to File a Complaint
8
Office of the Law Revision Counsel. 29 U.S. Code 255 – Statute of Limitations