From Indiana Originals Member HR Partnerships... Unpaid internships are popular across the country, providing benefits for companies and valuable experience for college students or recent graduates. The Department of Labor (DOL) issued guidance in 2010 that addresses how internship programs must be structured to comply with the Fair Labor Standards Act (FLSA). A common misconception exists that if a student is willing to work for free to get industry experience, then there’s no harm in taking advantage of it. Unfortunately, this practice leaves many employers open to substantial legal liability. Make sure your unpaid internships meet DOL standards to help avoid significant penalties. DOL Guidance The 2010 guidance addresses unpaid internships under the FLSA, clarifying the determination of whether an intern is considered an employee (subject to minimum wage) or a trainee (legally eligible to perform unpaid work). These guidelines apply to for-profit, private sector employers. Unpaid internships in the public sector and for non-profit charitable organizations are generally permissible under the FLSA. (Read more).