The Unpaid Intern Problem: When Internships Cross Into Wage Theft

Unpaid internships are legal under California law only in narrow circumstances. Most unpaid internships — particularly at for-profit companies — are illegal, and the interns are employees owed minimum wage for every hour worked.

The Test

California applies a multi-factor test to determine whether an unpaid internship is lawful. Key factors include: whether the internship is structured around an educational program, whether the intern displaces regular employees, whether the employer derives immediate advantage from the intern’s work, and whether the intern was clearly informed the position was unpaid.

Interns who do real work for for-profit companies are almost always employees. The legal unpaid internship is an educational experience that benefits the intern primarily. When the company benefits from the work — by having tasks completed that employees would otherwise do — those hours are compensable. Former interns have viable wage claims going back three years.

The California Wage Theft Recovery System gives workers the exact tools and templates to document violations, calculate what they’re owed, and file the right claims at the right agencies — without paying an attorney to get started. Request your free evaluation here.