Video Summary:

In this transcript from a video by Gale & Vallance, employment attorney Andy Gale discusses California unpaid internship laws and what employers need to know when hiring interns during the summer. He explains the Department of Labor’s six-part test, the “primary beneficiary” standard set by the U.S. Court of Appeals, and why workplace protections still apply whether interns are paid or unpaid.

Please note, this video is for educational purposes only and does not constitute legal advice. For guidance on your specific situation, we strongly recommend contacting a qualified employment lawyer.

00:00:00 – Introduction: Summer Hiring and Internships

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We are coming up on the summertime and may be looking for some additional assistance in our business while some of our key employees are away. A common way to get some additional coverage during this time period is by turning to interns. A common question that I get at this time of the year is whether or not it is okay to bring on unpaid interns. And the answer is yes… well maybe.

00:00:29 – Department of Labor’s Six-Part Test

The Department of Labor has a six-part test for determining whether interns may be unpaid. As a best practice, we recommend that you use unpaid interns only if all six of these criteria are met:

  • The internship is similar to training which would be given in an educational environment.

  • The internship experience is for the benefit of the intern.

  • The intern does not displace regular employees but works under close supervision of existing staff.

  • The employer that provides the training derives no immediate advantage from the activities of the intern and, on occasion, its operations may actually be impeded.

  • The intern is not necessarily entitled to a job at the conclusion of the internship.

  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all of the criteria listed above are met, an employment relationship will not be deemed to exist under the Fair Labor Standards Act. Without an employment relationship, the intern will not be considered an employee and thus the Act’s minimum wage and overtime provisions will not apply to them.

00:01:58 – Court of Appeals: The “Primary Beneficiary” Test

In addition to the Department of Labor’s criteria, a U.S. Court of Appeals ruled in 2015 that the proper question is whether the intern or the employer is the primary beneficiary of the relationship. The court then used a seven-point list, very similar to the Department of Labor’s, to evaluate the circumstances as a whole.

00:02:23 – Workplace Protections Still Apply

A final thought: it is important to note that workplace protections—like the Civil Rights Act, the ADA, OSHA, and many state-specific laws—apply to interns whether paid or unpaid.

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Conclusion: California Unpaid Internship Laws

Understanding California unpaid internship laws is critical for businesses that want to hire interns while staying compliant with both state and federal requirements. The six-part test and primary beneficiary rule provide important guidance, but interns—paid or not—are still protected under employment laws. If you are considering an internship program, it’s best to speak with a qualified employment attorney to ensure your policies meet California’s strict standards.