Can an Employer Pay an Intern a Stipend?

By Chelsea Jensen posted 05-19-2023 08:38 AM

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Internships have long been valuable for students and young professionals to gain real-world experience and explore potential career paths. Employers sometimes would like to provide a weekly stipend for interns rather than regular wages. This arrangement can only work in limited circumstances.

If your private, for-profit organization is participating in an unpaid educational internship program, you may be able to provide an expense reimbursement stipend under limited circumstances, including the following:

If the unpaid educational internship program allows stipends; and
The program meets all the requirements under applicable federal and state law for unpaid educational internships; and

The stipend reimburses expenses (like food or travel) rather than pays for work performed.

People who volunteer time as a public service for public employers and nonprofits like religious, charitable, humanitarian, or educational organizations are generally not covered by the Fair Labor Standards Act (FLSA) and are exempt from minimum wage laws. An organization may pay no compensation or a stipend (e.g., a small amount of money paid for the entire summer, meals, or transportation). For more information, see the U.S. Department of Labor (DOL) Opinion Letters FLSA 2001-18 & FLSA 2006-4.

If you need assistance determining if your intern can be paid a stipend, don't hesitate to contact Employers Council for help. You can also learn more about unpaid interns in general in our whitepaper. 