In order to comply with federal law, unpaid internships at for-profit employers must meet six criteria:
1. The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction;
2. The training is for the benefit of the trainees;
3. The trainees do not displace regular employees, but work under their close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded;
5. The trainees are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees understand that the trainees are not entitled to
wages for the time spent in training.
Meeting these six criteria means an intern is a “trainee” instead of an “employee” and minimum wage and overtime provisions of the Fair Labor Standards Act do not apply.
Nancy J. Leppink, the acting director of the U.S. Department of Labor Wage and Hour Division, stated: “If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law.”
It is rare to find an employer that does not benefit in some way from an intern. Whether it’s the immediate benefit from the work a student completes during his/her internship or the long-term benefits of converting interns to full-time staff, most companies are willing to take on an intern because it helps their bottom line.
Recognizing this, most for-profit employers pay their interns, with the exception of some industries in which competition is fierce and jobs are scarce (film, music, sports and other entertainment industries, for example). The “payment” in these industries is exposure, networking opportunities and the rare opportunity to gain insider access into industries that are notoriously difficult to get a foot in the door.
I understand the value of those things, but I think not paying students working in those industries is ridiculous. From what I can tell, there are a lot of people making a lot of money in many of these industries. Seems to me it wouldn’t be that difficult to fork over (at least) minimum wage for a student who desperately wants to gain experience and works extremely hard to do so.
In addition, as the article points out, unpaid internships can disadvantage low and middle income students who cannot afford to take an unpaid position. This is unfortunate, because by limiting pay an employer is also limiting the pool of talent from which they can select an intern. Employers who do not pay their interns because demand is so high they don’t have to are, in effect, maintaining an employment system that unfairly disadvantages those from lower incomes and less connected backgrounds.
Yet, given the inequity of unpaid internships, I still encourage students who are trying to establish their personal brand to seek out whatever experience they can. This might mean working for free, in some way. Employers offering unpaid internships should at least be flexible with work hours so that students who need to work can find a paying gig on the side.
I‘m curious what students think about this article. Does your dream internship have to be paid? Have you had an internship in which the employer took advantage of you because you weren’t considered a “real” employee? Have you had an unpaid internship for which you had to make sacrifices to make it work? Have you not applied for certain internships because you needed to earn money to pay for your education?
For-profit employers who don’t pay your interns – is there something I’m missing here? Tell me what’s up with that.
Kelly is a career advisor at the University of Wisconsin-Madison, where she assists undergraduate business students with all aspects of their career development. Connect with Kelly on Twitter, her blog, LinkedIn or BrazenCareerist.