Many early-stage game studios look for ways to manage costs while moving projects forward. The idea of using unpaid interns often comes up during these conversations. It might seem like a win for both the unpaid intern and the studio, but the legal reality around unpaid internships is strict, and mistakes can become expensive.

In the United States, the Department of Labor uses a test to determine whether an intern can be unpaid in a for-profit business. The key question is whether the intern is the primary beneficiary of the arrangement. The internship should provide educational training similar to what would be given in a classroom, and the benefit of the work should flow primarily to the intern, not the business. An intern should not replace a paid employee and should work under close supervision that emphasizes learning rather than production deadlines.

The DOL’s seven factors are:

1. “The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee and vice versa.
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.”

State-specific labor laws may also impose additional requirements or restrictions on unpaid internships beyond federal guidelines.

Game development often involves production schedules and deliverables that add real value to the business. If an intern writes code, creates art assets, tests builds, or manages community tasks that contribute to a commercial product, it will be difficult to show that the internship exists mainly for the intern’s benefit rather than the business’s. Even if an intern agrees to work without pay for experience, that agreement does not override labor laws. Misclassifying interns can lead to liability for unpaid wages, overtime, penalties, and even tax issues, along with reputational harm within the industry.

There are paths for studios that want to support interns while managing compliance risks. One approach is to pay interns, even at a modest hourly rate, while ensuring the arrangement still provides educational value. Another option involves partnering with accredited colleges or universities that offer structured internship programs for course credit. These programs often have guidelines to ensure the internship meets the educational goals of the student, while giving the studio a framework to operate within legal boundaries. Studios can work with career services offices at universities to establish these partnerships, which can also help with talent pipelines as the business grows.

Early-stage teams that want to build strong relationships with emerging talent can benefit from hosting interns, but it is important to structure these opportunities in a way that complies with labor laws. Using paid internships or working through approved university credit programs allows a studio to support learning while reducing the risk of costly disputes down the line.