WASHINGTON – Internships have long been recognized as steppingstones to employment after college.
But now,the question has been raised: Are unpaid internships legal?
Ariel Cudkowicz,a leading wage and hour industry consultant and partner at Seyfarth Shaw law firm,hears regularly from employers seeking to set up unpaid internship programs.
“Employers are looking at alternative ways for dealing with their labor needs,” Cudkowicz said.
University administrators and public policy experts are becoming increasingly outraged at the treatment unpaid internships are receiving from employers. In addition,the federal government issued a reminder in April about internships and fair pay laws.
“It doesn’t matter to me what your situation is. The only way to meet labor needs is with a paycheck,” said Kathryn Edwards of the Economic Policy Institute.
Corporate representatives,university administrators and students gathered Tuesday at a day-long conference held at George Washington University to discuss the issue.
At stake are thousands of internships with for-profit corporations and small businesses across the country. Nonprofits are allowed to have volunteers, so the law applies differently.
Some employers maintain that having unpaid internships allows them to expand their offerings and accept interns from a wider variety of backgrounds.
Ross Herosian,internships and human resources special projects manager at Sirius XM radio,said he can accept students based on their passion and not just their qualifications because Sirius does not pay its interns. Sirius interns work in sales and marketing and help produce news, talk and sports programs.
“If we had to pay,our program would have to be slimmed down significantly,” Herosian said. “The effect would be that well-thought-out programs like ours would be negatively affected.”
The 1938 Fair Labor Standards Act regulates unpaid internships,and the Department of Labor enforces the statute. For-profit employers must meet a six-part test to determine if an internship can be unpaid. If employers fail even one section,interns must be paid. Some companies have been forced to come up with back pay for interns.
Regardless of legality,students have proven eager to gain experience from internships. Many have never heard of the fair labor law and how it applies to internships.
Danielle Meister,who earned bachelor’s degree in journalism and mass communications from George Washington University this year,interned without pay at a news network and with pay at a strategic communications firms.
“I can’t imagine going through college without any internship experience,” Meister said. “Internships were incredibly important to my career path.”
She is completing a third internship for pay and freelancing for a news network.
DOL’s enforcement has never met the desires of intern’s rights advocates,and experts rarely come to a consensus on how to interpret it.
“The law as it stands under the FLSA is undefined,” Cudkowicz said. “The current economic climate is going to drive us to solve this issue.”
Michael Oswalt from the Office of General Counsel in the Service Employees International Union,said, “There is no internship exemption in the statute. … Interns are in an extremely vulnerable position. It is very difficult for them to file a complaint.”
Internships help students build professional networks and find jobs,but many students are unable to take on unpaid internships,especially if they must pay for housing and living expenses. Added to that is the common requirement that students must receive academic credit for internships,forcing students to pay thousands of dollars in tuition to work for free.
“I had to pay for credit for an internship,which basically cost me an extra $3,000,” Meister said.
The high costs particularly hurt poor and minority students,preventing many worthy but disadvantaged students from holding unpaid internships.
“If you put a price on something,poor people will be less able to have it,” Edwards said.
The DOL Wage and Hour Division fact sheet,issued in April,lists the six-part test for legal unpaid internships.
Employer and interns must agree that it is not a paid position. The internship must benefit the intern and provide training similar to that of an educational environment. It must not take over the work of regular employees,and employers cannot guarantee a job at the conclusion. Of particular significance is the clause mandating that employers gain no immediate benefit from the intern’s work.
“Where do we go from here?” said event organizer Alan Morrison,associate dean for public interest and public service at George Washington University Law School. “We ought to do something. There is too much uncertainty.”