Across the country, the spring academic semester is coming to a close. Scores of college students are set to take up unpaid internship positions, some of them legal, many of them not.
On its face, unpaid internships appear to violate minimum wage laws. Indeed, in many cases, they do. However, federal law permits them where unpaid interns are “trainees” rather than “employees.” To qualify as a trainee, an unpaid intern’s position must satisfy a six-factor test established by the Department of Labor:
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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;
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The training is for the benefit of the trainees;
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The trainees do not displace regular employees, but work under their close observation;
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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;
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The trainees are not necessarily entitled to a job at the conclusion of the training period; and
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The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.
Even though many unpaid internships do not satisfy the trainee requirement, employers rarely face sanction. After all, for them to face sanction, the unpaid interns would have to file complaints. As interns are often hoping to get into the industry they are interning in, the last thing they want to do is bring suit against major players in it.
With that said, legal action against illegal internships appears to be on the rise. Charlie Rose recently got slapped with a class action lawsuit brought by former interns, which was settled for $250,000. Unpaid interns who worked on the film “Black Swan” recently brought a suit for back wages, which is still pending. An unpaid intern who worked at Harper’s Bazaar magazine also recently filed suit.
Behind the legality issue, there is a generally overlooked policy question about what role we think internships should play in our society. The strongest case in favor of unpaid internships is that they provide an alternative and supplemental way to deliver vocational knowledge. On this view, internships are part of our society’s educational system.
By itself, this does not seem like a far fetched notion. Hands-on learning is valuable. I don’t think anyone would contest that. But if we are going to treat internships as an educational institution, then we have to ask ourselves whether they meet the standards we generally require of such institutions. Most importantly, do they live up to the standards of equal access to those from all backgrounds? To that question, the answer is clearly no.
Unlike college education, for which individuals can at minimum take out loans, unpaid internships provide no financial aid whatsoever. The net effect is that those who can afford to work without incomes do so, and gain the skills and contacts that come along with internships. Those who cannot afford to work wthout incomes have no choice but to forgo internships, which disadvantages them later on in the hunt for jobs.
Whether this problem is best solved by getting rid of unpaid internships altogether or by providing financial aid to those who undertake them is a complicated question that deserves lengthy treatment not possible here. What is clear however is that the status quo system of unpaid internships cannot remain as it is, both because it is largely illegal, but also because its wildly unfair.