<p>The U.S. Department of Labor doesn’t require that unpaid interns receive school credit. Its guidelines say unpaid internships are permissible under the Fair Labor Standards Act if:</p>
<ol>
<li>The internship is similar to the training given in a vocational school.</li>
<li>The training is primarily for the benefit of the intern, not the employer.</li>
<li>The intern does not displace any regular employees, and works under close supervision.</li>
<li>There is no immediate advantage to the employerand in fact, operations may be impeded by the training.</li>
<li>The intern is not guaranteed a job at the completion of the internship.</li>
<li>The intern and the employer both understand that the intern shall receive no pay for the training.</li>
</ol>
<p>In other words, unpaid internships (with or without school credit) are SOMETIMES legal–and sometimes not. The tricky criterion here is #4, “no immediate advantage to the employer.” Most interns are expected to do real work, and most employers who establish internships expect it to be a mutually beneficial relationship; otherwise, why bother? In fact, #4 seems on its face to contradict #2, “the training is primarily for the benefit of the intern, not the employer,” insofar as #2 seems to contemplate some mutual benefit but more to the intern than to the employer. Most employers (and their lawyers) seem to think they’re on relatively safe ground as long as there’s a substantial benefit to the intern and the other criteria are clearly met.</p>
<p>Here’s a thoughtful and balanced discussion of the legal issues:</p>
<p>[Rites</a> of spring: The hidden dangers of hiring unpaid interns - Business Management Daily](<a href=“http://www.businessmanagementdaily.com/articles/8088/1/Rites-of-spring-The-hidden-dangers-of-hiring-unpaid-interns/Page1.html]Rites”>http://www.businessmanagementdaily.com/articles/8088/1/Rites-of-spring-The-hidden-dangers-of-hiring-unpaid-interns/Page1.html) </p>
<p>Careful, though. Many states have their own labor standards laws which are not necessarily preempted by the federal Fair Labor Standards Act, and additional state restrictions might apply.</p>