The honest answer, in every country covered here, is: it depends, and the test is stricter than most employers assume.

"Is it legal to not pay an intern?" sounds like a question with a yes or no answer. It isn't. In the United States, the United Kingdom, and Nigeria alike, the answer turns on a specific, fact-based test, and in at least one of these three countries, the honest answer right now is that there is barely any legal test at all, which is its own kind of problem. Getting this right matters for two very different audiences at once: employers who can face real financial liability for getting the classification wrong, and interns, often young, early-career, and least able to absorb a bad outcome, who deserve to know exactly what they're entitled to before they accept an offer that pays nothing.

The United States: A Specific, Seven-Factor Legal Test, Not a Vibe

Under the federal Fair Labor Standards Act (FLSA), the default legal assumption is that anyone performing work for a for-profit business is an employee entitled to minimum wage and overtime. An unpaid internship is a narrow exception to that default, not a separate category businesses can simply declare into existence. Since January 2018, the US Department of Labor has applied what's known as the "primary beneficiary test," adopted from the Second Circuit Court of Appeals' ruling in Glatt v. Fox Searchlight Pictures, a case in which unpaid interns who had worked on the film Black Swan sued over their classification (Pillsbury Law). The Second Circuit's ruling, and the Department of Labor's subsequent Wage and Hour Division Fact Sheet #71, set out seven factors courts weigh collectively, with no single factor being determinative on its own (US Department of Labor Wage and Hour Division, Fact Sheet #71):

  1. Whether both parties clearly understand there is no expectation of compensation.
  2. Whether the internship provides training similar to what an educational environment would offer.
  3. Whether the internship is tied to the intern's formal education, through coursework or academic credit.
  4. Whether the internship accommodates the intern's academic schedule and commitments.
  5. Whether the internship's duration is limited to the period of genuinely beneficial learning.
  6. Whether the intern's work complements, rather than displaces, the work of paid employees.
  7. Whether both parties understand the internship doesn't guarantee a paid job afterward.

The test is explicitly described by the courts as flexible, weighing the "economic reality" of the relationship as a whole (US Department of Labor Wage and Hour Division, Fact Sheet #71). Crucially, the test does not require that the employer receive zero benefit, only that the intern is the primary beneficiary overall. The 11th Circuit Court of Appeals confirmed this directly in a more recent case, ruling that the FLSA permits unpaid internships even where the employer does derive some benefit from the intern's work, so long as the court finds the intern remains the primary beneficiary on balance (HR Dive).

It's worth being precise about scope here, since this is a point many informal guides get wrong: this test applies specifically to for-profit employers. Unpaid internships at public sector agencies, and at nonprofit, religious, civic, or humanitarian organisations, are generally permissible under the FLSA without needing to satisfy the same seven-factor analysis, reflecting a long-standing exemption for genuine volunteer work (Ogletree).

Several US states layer additional requirements on top of the federal test. New York's standard, for instance, specifically requires that any training provided be transferable rather than company-specific, and explicitly states the internship cannot provide any "immediate advantage" to the employer, even in cases where the intern is otherwise found to be the primary beneficiary under the federal test (Business News Daily). Employers operating across multiple states need to check each relevant state's rules individually, not assume federal compliance is sufficient everywhere.

The consequence of getting this wrong is real and specific: if an internship is found to misclassify what was actually employment, the business can be held liable for unpaid back wages and, in many cases, additional damages, a liability that employment law commentary notes is often more costly than simply having paid appropriately from the outset (Ogletree).

The United Kingdom: Worker Status Decides It, Not the Job Title

UK law takes a different structural approach, built around the National Minimum Wage Act 1998. The starting legal position is that anyone classified as a "worker" is entitled to be paid at least the National Minimum Wage, full stop, and critically, UK guidance states explicitly that an employer cannot avoid this obligation simply by labelling someone an "intern" or "volunteer" in a written agreement. What actually determines entitlement is what the person genuinely does in the role, not what the arrangement is called on paper (theInterna).

UK law recognises a narrow set of circumstances where an internship can lawfully be unpaid: specifically, mandatory student placements required as a formal, assessed part of a UK-based further or higher education course, provided the placement lasts no more than one year, and genuine volunteering or pure work-shadowing involving no actual assigned tasks (Davidson Morris, 2026 Employment Law Guide). Outside those specific categories, an intern performing real work on anything resembling a set schedule is very likely legally a worker, and therefore entitled to pay, regardless of their job title.

This issue has received significant, current UK government attention. Following a formal call for evidence launched in July 2025, the UK Government published its response in February 2026, confirming it would not introduce an outright ban on unpaid internships at this stage, but would instead update and expand National Minimum Wage guidance and strengthen enforcement (Hansard, UK Parliament, debated 2 March 2026). Enforcement has also been structurally strengthened: the UK Government launched the Fair Work Agency on 7 April 2026, a new executive agency sponsored by the Department for Business and Trade, consolidating enforcement powers specifically including National Minimum Wage compliance (BTO Solicitors). As of 6 April 2026, the National Living Wage for workers aged 21 and over stands at £12.71 per hour (BTO Solicitors), the rate against which a misclassified "unpaid intern" could potentially claim back pay.

Nigeria: A Genuine Legal Gap, Not Just an Enforcement Gap

This is where the picture becomes genuinely different from the US and UK, and worth stating plainly rather than softening. Nigeria currently has no dedicated legal framework specifically defining or protecting the rights of interns. Nigerian commentary on the issue is direct about this: unpaid internships persist at scale in Nigeria largely because there is no regulation governing them at all, no equivalent to the FLSA's primary beneficiary test or the UK's National Minimum Wage worker classification that interns can point to in asserting a right to pay (Edugist). The National Youth Employment Action Plan (NYEAP), launched in 2021, references youth skill development as a policy goal but, according to the same analysis, offers little in the way of concrete, enforceable labour protections specific to internship arrangements (Edugist).

This gap sits alongside, and is genuinely distinct from, Nigeria's one structured internship mechanism with any formal payment attached: the Students Industrial Work Experience Scheme (SIWES), administered through the Industrial Training Fund (ITF), established under the Industrial Training Fund Act. SIWES students may receive a modest allowance, commonly cited as roughly ₦15,000 for the full six-month placement, paid by the ITF after training concludes and the required documentation is submitted, alongside whatever additional allowance, if any, the host company chooses to provide on top of that (Monoed). It's worth being clear that this stipend is modest, frequently delayed, and in practice not guaranteed, some students complete the full programme and receive nothing at all due to missing documentation or funding shortfalls on the administering side (Monoed). SIWES is also structurally distinct from a general unpaid internship: it exists specifically to satisfy a mandatory academic requirement for students in approved fields of study, administered through the ITF's formal processes, rather than as an open-market arrangement between any employer and any graduate seeking experience.

Outside of SIWES specifically, general post-graduation internships in Nigeria, the kind a fresh graduate applies for directly with a company, operate in largely unregulated territory. There is no Nigerian equivalent of the FLSA test an intern can invoke, and no Nigerian equivalent of the UK's worker-status protections. This matters directly for the brain drain dynamics we've covered elsewhere: Nigerian commentary on this issue has drawn an explicit, pointed comparison, noting that a Nigerian graduate can currently earn considerably more as a minimum-wage cleaner in the UK, with the legal protections that come with that status, than as an unpaid intern at home, a genuine incentive layered on top of the broader economic pressures already covered in our piece on Nigeria's underemployment and labour market realities (Edugist).

Presenting Both Sides of the Underlying Debate

It's worth being fair to the genuine, non-cynical case for unpaid internships, since the debate is more substantive than a simple "exploitation versus opportunity" framing allows.

The case for allowing some unpaid internships: Genuine educational-style placements, closely supervised, time-limited, and structured primarily around the intern's learning rather than the business's output needs, can provide real value that a classroom alone cannot replicate, particularly in fields like film production, publishing, fashion, and the arts, where US regulators have historically acknowledged unpaid arrangements remain comparatively common (Ogletree). A rigid, blanket ban risks removing legitimate, carefully structured opportunities entirely, rather than only removing the exploitative ones, an outcome that would primarily hurt the students and early-career candidates the protection was meant to help.

The case against allowing them, or for regulating them far more tightly: Advocacy groups in the UK, including Intern Aware, argue unpaid internships are inherently exploitative and exclusionary, since they structurally favour candidates who can afford to work without income, systematically disadvantaging talented candidates from lower-income backgrounds regardless of their actual ability (Wikipedia, summarising Intern Aware's published position). Nigerian commentary makes a related, locally specific argument: that the power imbalance in Nigeria's labour market, where, as one analysis puts it, employers know that for every unpaid intern who leaves, several more are waiting to take the position, allows some organisations to cycle through free labour indefinitely while branding the practice as youth development, with no legal requirement to ever convert or compensate anyone (Edugist).

Both positions have genuine merit, and the regulatory approaches of the US and UK, a specific legal test rather than an outright ban, broadly try to split this difference: permitting internships that are genuinely educational while making it very difficult to just rebrand unpaid labour as an "opportunity." Nigeria's current absence of any equivalent test means that distinction currently cannot be legally enforced at all, regardless of which side of the debate an individual employer or intern actually falls on.

What This Means in Practice

For employers in the US or UK, the practical takeaway is specific and actionable: document, in writing, how your internship programme satisfies the applicable legal test before engaging any unpaid intern, not after a dispute arises. Legal and HR guidance consistently recommends reviewing each internship individually, since a blanket company policy rarely survives case-by-case scrutiny if challenged (Hilb Group).

For job seekers evaluating an unpaid offer anywhere, understanding which legal framework, if any, actually applies in your jurisdiction is worth doing before accepting, since it directly shapes what recourse, if any, exists later. This is also where presenting any internship experience well afterward matters enormously, since the quality of what you can demonstrably show from the experience, not whether it was paid, is ultimately what a future employer screening your CV will actually evaluate, a point covered directly in our guide to common CV mistakes that cause instant rejection.

For Nigerian policymakers and employers specifically, the clearest gap identified across current commentary is the absence of any legal test comparable to the US or UK frameworks, something that would give both sides, employer and intern, a shared, predictable standard to work from rather than the current, entirely unregulated arrangement.

The Bottom Line

Unpaid internships are legal in the United States and the United Kingdom, but only within genuinely narrow, actively enforced boundaries built around specific legal tests, not simply because an employer chooses to call the arrangement an internship. In Nigeria, the more accurate statement isn't that unpaid internships are legal or illegal, it's that the question currently has no clear legal answer at all, because no comparable test or framework yet exists to apply. That absence carries real consequences on both sides of the employment relationship, and closing it, through a defined, Nigeria-specific standard modelled on the kind of fact-based tests already operating in other major labour markets, remains one of the more concrete, achievable reforms available to improve how Nigeria's internship market actually functions for the graduates currently navigating it.

This article draws on primary legal sources including the US Department of Labor's Wage and Hour Division Fact Sheet #71, the Second Circuit's ruling in Glatt v. Fox Searchlight Pictures, UK Hansard parliamentary records and the UK Government's February 2026 response to its call for evidence on unpaid internships, and Nigerian labour market commentary, current as of late September 2026. Laws and enforcement practices in this area are actively changing in both the UK and US, and the specific figures and legal standards cited here should be verified against current official guidance before being relied upon for a specific legal decision. This article is intended as general information, not legal advice.