Is an unpaid internship legal? What students should check

The short answer

It depends on where you are and how the internship is set up. In many places, if you do work for an organisation you are treated as an employee — with a right to at least the minimum wage — unless the arrangement meets specific tests. Those tests share one idea: an unpaid internship has to benefit you more than it benefits the organisation. Real training, no replacing paid staff, and no promise of a job used as payment.

United States: the “primary beneficiary” test

For for-profit employers, the U.S. Department of Labor uses a “primary beneficiary” test, set out in its Fact Sheet #71. It weighs seven factors, and no single one decides the outcome:

1. Whether you and the employer clearly understand there is no expectation of pay.
2. Whether the internship provides training similar to what you would get in an educational setting.
3. Whether it is tied to your formal education, through coursework or academic credit.
4. Whether it fits around your academic commitments, such as the academic calendar.
5. Whether its length is limited to the period in which you are genuinely learning.
6. Whether your work complements, rather than displaces, the work of paid employees.
7. Whether you both understand there is no entitlement to a paid job at the end.

Different rules apply to volunteering for non-profits and the public sector, and some states add their own requirements.

British Columbia, Canada: work means pay

B.C.’s Employment Standards Act has no general exception for unpaid internships. If you do work that a business would otherwise pay someone to do, you are an employee and must be paid at least minimum wage, whatever the role is called. The main exception is a practicum that is part of a formal education program, such as a co-op placement your college or university arranges or approves. If a B.C. business offers you an unpaid “internship” outside your studies, ask your school’s co-op office or the Employment Standards Branch before you start.

Ontario, Canada: the trainee conditions

Under Ontario’s Employment Standards Act, someone who performs work is generally an employee entitled to minimum wage. Exceptions include work that is part of a program approved by a school board, college or university. Outside those programs, an unpaid trainee arrangement is only allowed if all six of these conditions are met:

1. The training is similar to what is given in a vocational school.
2. The training is for the benefit of the person being trained.
3. The organisation providing it gets little, if any, benefit from the trainee’s activity.
4. The trainee doesn’t displace the organisation’s employees.
5. The trainee isn’t given a right to become an employee.
6. The trainee is told they will not be paid for the time spent training.

Other provinces, and federally regulated employers, have their own rules.

United Kingdom: workers and the minimum wage

In the UK, an intern who counts as a “worker” is usually entitled to the National Minimum Wage, whatever the role is called. Exceptions include placements that are a required part of a UK further or higher education course, and work shadowing where you only observe. Voluntary work for charities has separate rules.

Questions to ask before you say yes

• Who benefits from my work? If the organisation would sell, ship or rely on what you produce, you are probably working, not training.
• Would they otherwise pay someone to do this? Replacing a paid role is a warning sign in every system above.
• Is there a learning plan and someone teaching me? Training needs a structure and a person responsible for it.
• How long does it last? Open-ended unpaid work is hard to justify as training.
• Is it in writing that the role is unpaid, and that it doesn’t guarantee a job?
• Can I leave at any time, and keep what I made for my portfolio?

Red flags

• “Trial” work on a real client project, or on the company’s live product.
• Fixed hours, production targets or quotas.
• “We’ll hire you if you prove yourself” as the reason the work is unpaid.
• No one assigned to teach or review your work.
• Being asked to sign away ownership of everything you make, with nothing in return.

How Branchout approaches it

Branchout is run from British Columbia, so it is built to B.C.’s stricter line, meets the U.S. and Ontario tests above, and applies the same standard everywhere else: the work is for your learning, project briefs are simulations rather than work for a company, there is no promise of a job, you are told up front that it is unpaid, and you can leave at any time with your work. Read how the program is structured.