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ARTICLE · 08 MARCH 2016

Unpaid Internships

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The idea of offering unpaid internships is attractive for startups trying to maximize their labor force while minimizing spending.

United StatesEmployment and HR
Laura Schneider
Laura Schneider
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The idea of offering unpaid internships is attractive for startups trying to maximize their labor force while minimizing spending. However, using unpaid interns can pose significant legal risks. This post will help you understand the risks of intern misclassification, navigate the federal and state legal requirements for unpaid internships, and learn how to structure compliant unpaid internships if they are appropriate for your company.   

Understanding the Law Regarding Unpaid Internships

Both federal and state laws govern who is considered an employee and therefore must be compensated for services performed. For example, the federal Fair Labor Standards Act sets minimum-wage and overtime requirements for employees and requires that individuals who are "suffered or permitted" to work must be compensated for the services they perform. Most interns in the private sector will be considered employees under federal law; only if they receive training for their own

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