Insight on Unpaid Internships

If you have been keeping up with business news lately (as you should!), you know that there is a lot of talk out there about unpaid internships.

Two companies, Fox SearchLight and The Hearst Corporation, are among several that have recently found themselves defendants in law suits stating that by not paying their interns, they are violating labor laws.  The plaintiffs in each case (former interns) charged that they were doing the work of paid employees and, thus, were entitled to monetary compensation.

This brings up many interesting issues regarding unpaid internships.  Many companies offer unpaid internships.  Most, we would assume, do so because they do not have money in their budget to offer a paid internship but want to offer a student an opportunity to gain real-word work exposure, while also getting some help.  Should they not be allowed to do this? One argument is that unpaid internships discriminate against students who are not in a financial position to accept such an internship.  Many students need to work in order to support themselves and their education, so an unpaid internship is just not possible for them. But does that mean that they should not exist?

There are six points that the Department of Labor looks for when determining if an internship is valid, or whether the intern should be classified as an employee, and thus receive at least minimum wage. The two biggest points center on the issues of whether or not the work that is being done by an intern can be done by a paid employee, and the other is whether or not the employer derives any sort of benefit or advantage from the duties of the interns.  So, what does that mean?

Here is an example; Jane has an unpaid internship at Company A.  Her duties include running errands, photocopying documents, and answering the telephone.  All of these duties are benefiting the company, as in the end the company gets its errands run, its documents photocopied and its telephone answered. Also, these could be the job responsibilities of an entry-level administrative assistant, who would receive a paycheck for these same duties.

The fallout from these lawsuits is that some companies may begin to fear that offering unpaid internships will open them up to potential legal scrutiny and may forgo the practice altogether.  (It is important to note that these legal guidelines do not apply to not-for-profit organizations, so we will always see non-paid internships in this industry.)

That is not to say that unpaid internships will cease to exist.  Many students will continue to accept these positions as a way to build a resume and make networking contacts.  This information, however, does highlight the fact that internships should first and foremost be about LEARNING.  Consider asking a potential internship supervisor questions about the learning goals during your interview.  Creating a written learning outcome plan is a great way to monitor your progress, for both paid unpaid internships.

Darlene Johnson, Senior Associate Director