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Is your unpaid internship legal?

Jenna Johnson

The job market is still terrible, many employers are slashing their budgets and college students are desperate for experience. So, it's really no surprise that the number of unpaid internships is climbing, according to The New York Times.

But some employers have taken advantage of students (who are often afraid to file complaints) and violated minimum wage laws, prompting investigations in Oregon, California, New York and other states -- plus a nationwide crackdown by the U.S. Labor Department.

About half of seniors who graduated in 2008 had held internships, up from 17 percent in 1992, according to the National Association of Colleges and Employers found that 50 percent of graduating students had held internships. Some experts estimate one-fourth to one-half of those hundreds of thousands of interns are unpaid.

On Wednesday the labor department released a fact sheet that clarifies exactly what constitutes a fair, unpaid internship at a for-profit company. For an unpaid internship to be legal, there are six criteria that must be met:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

The Labor Department will also be educating colleges, career centers, internship coordinators and others to make sure everyone is well aware of the law. It's a difficult problem to monitor for authorities, the NYT reported, because interns are afraid to file complaints and risk hurting their career.

And no one keeps an official count paid and unpaid internships, but college officials who help students find internships say the number is mushrooming. At Stanford University, employers posted 643 unpaid internships on Stanford's job board this academic year, more than triple the 174 posted two years ago.

But some say that a public backlash against unpaid internships or more stringent regulations could reduce the opportunities for students to engage in educational experiences outside the classroom. And many employers don't want to lose their unpaid interns.

Michael True, director of the Internship Center at Messiah College, told The Chronicle that he worries the new rules might scare off good-faith employers offering quality internships. Such employers might "pull in the carpet and say, 'I'm sorry, we're not going to offer those,'" he said. "'This is just too big a risk for us."

Robin D. Richards, chairman and CEO of Internships.com, wrote in an open letter that college students are sophisticated and ambitious enough to discern which unpaid internships are a good investment of their time. In 2007-8, two out of three students who secured internships were offered full-time employment from the same company, according National Association of Colleges and Employers 2009 Experiential Education Survey.

"The way many of the students from the 3,900+ colleges and universities not considered elite compete with students from the elite institutions is not on paper but in the actual working environment. They show their value live," Richards wrote. "We as a country do not need to constrain ingenuity and hard work and free choice with legal roadblocks."

For students at the University of Maryland, College Park, to receive university credit for an internship, the student and employer must sign a learning contract outlining the student's role in the company and what he or she will get out of it, The Diamondback reported.

Still, the problem of illegal internships is difficult to track because many students are afraid of being "blacklisted" in their field or they are willing to do anything to boost their resumé, according to Megan O'Rourke, the internship coordinator for the University Career Center.

At the University of California, Davis, the Internship and Career Center has a three-part process to ensure that the college's roughly 6,000 student interns are not taken advantage of, The Aggie reported. First there is an agreement to the terms of the internship between the student and the supervisor that covers expectations, goals, tasks and other core parts of the internship. Then there is an evaluation from the site supervisor. Finally, the student writes an evaluation of the internship.

Further reading:

* One Day, One Internship wrote a blog post in 2008 that walks students through the laws regulating unpaid internships. The site lists postings for both paid and unpaid internships.

* True, the internship center director at Messiah College, runs a national e-mail listserv on internship issues and also wrote a manual for employers looking to start and maintain a quality internship program. Both are available on his Web site.

* And item No. 105 on the list of Stuff White People Like (the wildly popular blog that is now a book) is "Unpaid Internships."


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By Jenna Johnson  |  April 23, 2010; 3:09 PM ET
Categories:  D.C. Interns  | Tags: Internships, Stanford University, UC Davis, University of Maryland  
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Comments

I'm in the camp that believes a government backlash against unpaid internships will reduce opportunities for students. Nobody is forcing students to take unpaid internships; they are freely choosing to work for free. The government should only get involved if a company is defrauding its interns by lying about the content and value of the internship.

Posted by: bokamba | April 24, 2010 5:22 PM | Report abuse

I'm in the camp that believes there must be stronger federal regulation of employers who want to use internships (paid or not). Besides, there really is no value for a student working an unpaid internship in the for-profit sector. What are you really supposed to say on your resume? You obtain significant results doing "X"? Did you not read the fact sheet available? You can't be an unpaid intern and obtain ANY results because that would violate the 6 rules for unpaid internships. So, if any employer verifies that information on an unpaid intern's resume (after a background check for example)...then, that employer could be reported by to the US Dept. of Labor as a violator. So, a savvy employer wouldn't risk such a possibility and would simply not verify the content and value of the internship to future employers in such a way to make the student look good. All they could say is "it was for training purposes only". If you really want to get some experience under your belt, then you should have done one better...start up your own business venture, put out your shop shingle and hustle some business and get you a few customers to pay you an nominal fee for your talents and give you some references on your Linkedin profile. How hard is that?

Posted by: kitten2 | April 24, 2010 10:02 PM | Report abuse

Too bad that the man behind the survey has an agenda to demonstrate that the regulations are bad. There's so little info on unpaid internships that it would have been nice to have some objective data collection.

It seems like nobody's taking this issue from the right perspective.

Are unfair internships beneficial for individuals? Sure. Just as driving in the emergency lane is beneficial to the impatient driver. It's detrimental to the drivers as a whole.

Are students capable of selecting good internships? Sure. But do they have a choice not to work for free? Less every time one of their fellow entrants on the job market accepts to work for free.

We cover this issue at http://unfairinternships.com

Posted by: exintern | April 26, 2010 10:23 PM | Report abuse

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