[dragonwriter]

> The problem is that, generally by law, you can either pay them $0, or minimum wage, but not in-between.

I don't think that's true; if wage and hour laws apply, you must pay minimum wage ($0 is not an option). If the relationship isn't covered by wage and hour laws, you can pay them negative amounts (charge for training), $0, or pay a positive amount above or below the minimum wage (though in the latter case it will have to be framed as something other than pay for work, such as a stipend of some kind.)

[snrplfth]

That would be in a logically consistent world. We are not in that world.

The main rules are here, for unpaid internships: https://www.dol.gov/whd/regs/compliance/whdfs71.pdf

So unpaid ($0) internships are permitted for certain restricted circumstances. But if you fall outside this category, you jump right up to 'employee', and have to be paid the minimum wage. Basically, once you start paying, you have to pay all the way. (Now, there is a subminimum scale of 75% of the minimum wage, but it's only available for high school enrolees above 16 years of age, for vocational training, and is granted at the discretion of the Department of Labor: https://www.dol.gov/whd/minwage/q-a.htm)

[dragonwriter]

Actually, what I said is consistent with your link: where wage and hour laws apply, you must pay at least minimum wage. Where they don't, you can charge for the service of training, provide it at no charge, or provide a stipend (which on a hourly basis may be less than the equivalent of minimum wage) along with it.

[snrplfth]

Hmm...I do not see in those links where a sub-minimum stipend is allowed except in the case of high school vocational training. Can you quote it? (Criteria #6 appears to indicate no wages permitted.)

[dragonwriter]

Theres a distinction between stipends and wages, and while I can find lots of third party sites whose general character and other information suggests general reliability referencing the option to pay a stipend to trainee interns (while also warning of the need to assure they aren't structured as wages), I cant find an authoritative DoL source articulating a standard or test (or giving examples) distinguishing them.

[snrplfth]

Thanks for looking. I've never heard of it happening, but all sort of arrangements happen in the grey areas of the law. I've been stipended before as an intern, but under the understanding that my hourly "wage" would not drop below the minimum.