An unpaid internship should not involve doing ANY work that provides value to the company; the unpaid internship should be exclusively for your benefit as the intern. The moment you do work that adds value to the company, you must be paid. The easiest test of whether you should be paid is to ask yourself the following two questions: 1. Have I regularly performed tasks that needs to be done (i.e. if I weren’t around, would someone else have to do them)? 2. Is the organization I am interning for a for-profit? If the answer to both of those questions is YES, then the company is in violation of federal labor laws. For a more detailed test, look here: http://www.dol.gov/whd/regs/compliance/whdfs71.pdf
If the company is in violation of laws (which sounds likely), then you should do a handful of things. First, take time to list out everything you have ever done for them. Second, document every hour you have worked (exclude time you were not working, such as non-working lunches and breaks longer than 10 minutes). Third, ask nicely for compensation for the work you are doing.
From there, things could go different ways.
A) Your boss could grant your request for compensation appropriately. That means that he will either offer to give you back pay as well as pay going forward and that this pay will be greater than or equal to the minimum wage of your state. If you expect to work, say, 20 hours per week for 12 weeks, that means you need to be paid a minimum of $1,740, though that can take the form of hourly pay + back pay or a guaranteed stipend (anything not guaranteed won’t work).
B) Your boss could grant your request insufficiently. For example, if he says he will give you a stipend of $1,000, then you can only accept if you will have worked fewer than 138 hours over the course of the summer (that comes out to federal minimum wage of $7.25); that hours figure will be lower in states with a higher minimum wage (for example, if your state has a minimum wage of $10.00 per hour, then you cannot work more than 100 hours for a stipend of $1,000). If he says that he will pay you from this point forward, then you should not accept, as you are still owed back pay for the work you had done previously.
C) Your boss could deny your request for compensation. If that is the case, then make sure to get it in writing.
D) Your boss could fire you. If that is the case, then make sure to get a written reason for dismissal.
An important thing to note is that as an employee you are not ALLOWED to negotiate against yourself for something less than minimum wage. It is illegal for an employer to pay you less than minimum wage, and you are not permitted to waive your rights - this is done to protect people, like yourself, from being taken advantage of. So when I say that you “cannot accept” an offer, I truly mean you legally can’t accept and your boss can’t legally offer it! Furthermore, even if you spent the majority of your time on training type things, the company is still not excused from paying you fairly (this is because, as a full time employee, your employer is required to pay you for training as well).
If B, C or D are the outcome of your conversation, be sure you get things documented, and look into legal options. Several unpaid “interns” have won judgments against companies illegally exploiting them in the name of “gaining experience” in the past two years. The nice thing here is that if your employer tries to tell you that you are in the wrong, you will have the full weight of the law on your side. Fair compensation is your right, not a privilege.