Are unpaid internships legal in Texas?

Yes, when the intern is the primary beneficiary of the relationship under the DOL’s seven-factor test — typically a structured, school-connected, time-limited training experience. Unpaid arrangements that function like ordinary jobs are illegal regardless of what the position is called.

Do all seven factors have to be satisfied?

No. The primary beneficiary test is a flexible balancing test; no single factor is decisive. But a clear written agreement, an educational structure, and no displacement of paid workers carry the most weight in practice.

Can a for-profit company use volunteers instead?

No. The volunteer exception covers public agencies and nonprofit charitable organizations. A for-profit business that accepts free labor has an employee or a lawful intern — nothing in between.

How far back can a misclassified intern sue?

Two years from when the claim is filed, or three years for willful violations, with liquidated damages typically doubling the back-pay award.

Does Texas have its own intern wage law?

No. Texas follows the FLSA — the Texas Minimum Wage Act exempts FLSA-covered workers and adopts the federal $7.25 minimum wage, so the federal primary beneficiary test is the only test that matters. If you’re building an internship program or worried the one you have wouldn’t survive the seven-factor test, Reidel Law Firm advises Texas companies on Texas business law and employment compliance for a flat fee quoted upfront — no retainers, no hourly surprises. Contact us before the Department of Labor does the audit for you.

TEXAS BUSINESS LAW

Can a Texas Company Have Unpaid Interns? FLSA Rules

Schuyler 'Rocky' Reidel July 17, 2023 6 min read

Yes — a Texas company can have unpaid interns, but only if the intern, not the company, is the “primary beneficiary” of the arrangement under the federal Fair Labor Standards A