Faatimah Jafiq & Ty Hyderally, Esq.

May 16, 2025

Unpaid internships have long been a common practice, particularly for students and young professionals looking to gain experience in their field. However, for an unpaid internship to be legal, it needs to meet a rigorous test set forth by the US Department of Labor (DOL).

When Is an Unpaid Internship Legal?

In both New Jersey and New York, the general rule is that unpaid internships are only legal if they meet very specific criteria outlined by federal, state, and local labor laws. At the federal level the DOL uses a seven-factor test[1] to determine whether an internship qualifies as unpaid. This test is designed to ensure that the internship primarily benefits the intern, not the employer.

The seven factors include considerations like:

• Whether the intern is the primary beneficiary of the relationship
• Whether the internship is tied to an educational program
• Whether the intern is closely supervised and does not displace regular employees
• Whether there is a clear understanding that the intern will not be paid
• Whether the internship provides training that is similar to that which would be given in an educational environment
• Whether the intern’s work provides significant educational value

 The Hours an Unpaid Intern Can Work

Unpaid interns cannot work unlimited hours. Both New Jersey and New York adhere to federal standards set by the Fair Labor Standards Act (FLSA), which limits unpaid internships to a maximum of 40 hours per week during certain circumstances. However, in practice, unpaid internships should generally be short-term to maintain their legality. Long hours, particularly in excess of 40 hours per week, would raise red flags and likely lead to legal challenges.

Furthermore, interns should not be performing menial or routine tasks (such as making copies or fetching coffee) that provide little to no educational benefit. If an intern is being used in a way that benefits the employer more than the intern, there is a strong likelihood the internship is in violation of wage laws.

 Conditions Under Which Unpaid Interns Can Work

The work environment is another important consideration. In New Jersey and New York, unpaid interns cannot perform tasks that would be considered regular duties of paid employees, such as working in customer service, answering phones, or handling critical business operations. If an unpaid intern performs these types of tasks without receiving compensation, the internship may violate both state and federal labor laws.

Additionally, the internship must be educational in nature. Interns should be receiving training or mentorship that contributes to their personal and professional development. Employers are prohibited from using interns for their own benefit, such as filling a temporary staffing need or increasing productivity without paying wages.

 Ownership of Work Product Produced by Unpaid Interns

In both New Jersey and New York, unless otherwise agreed upon in writing, interns may retain the copyright or intellectual property rights to the materials they produce. Employers should have clear agreements in place regarding ownership of work product, especially in industries like media, technology, or design. Moreover, any agreement related to work product should be carefully crafted to comply with labor laws. Requiring interns to sign over their work product without compensation may lead to claims of unfair practices and exploitation.

Risks for Employers

The risks of offering illegal unpaid internships are significant. Employers may face lawsuits from former interns, potential penalties from the U.S. Department of Labor, and even class action suits. If interns are found to be misclassified as unpaid when they should have been compensated, employers could be required to pay back wages, interest, and damages. If you are an intern who suspects your internship may be violating labor laws, it’s essential to seek legal counsel to understand your rights and options.

If you have any questions regarding your rights as an employee, you should seek out an experienced attorney who concentrates in employment law. Our firm has concentrated in employment law for over twenty-two (22) years!

 En nuestra firma hablamos español. This blog is for informational purposes only. It does not constitute legal advice and may not reasonably be relied upon as such. If you face a legal issue, you should consult a qualified attorney for independent legal advice regarding your particular set of facts. This blog may constitute attorney advertising. This blog is not intended to communicate with anyone in a state or other jurisdiction where such a blog may fail to comply with all laws and ethical rules of that state or jurisdiction.

[1] https://www.dol.gov/agencies/whd/fact-sheets/71-flsa-internships