Times are changing, and there’s become more and more debate and legal concerns over whether or not students should accept unpaid internships or not. When I was in college, none of this drama or red tape existed – or if it did, nobody cared. I certainly didn’t.
All My Internships Were Unpaid
I took whatever internship I could get that would build my resume when I was in college. Mine were all unpaid and it was no big deal. I also firmly believe that each of my internship experiences definitely paid off in my job search and career. I had unpaid internships in a range of fields, and they helped me realize 1) I didn’t want to go into marketing, 2) I didn’t want to work in HR, 3) I didn’t want to work for a giant corporation, 4) I liked project work involving operations/editing/organizing, and 5) there are a ton of job choices out there.
Although unpaid internships were the norm in my collage days, the workforce is evolving. In recent years, the government has been cracking the whip on labor laws and says that volunteering and unpaid labor are only legal at nonprofits. Thus, most companies and intern applicants are being a lot more cautious with what they offer and accept.
In April 2010, the US Department of Labor published a fact sheet on six criteria that private sector for-profit internship programs must meet under The Fair Labor Standards Act for an internship to be unpaid. Basically, if an internship is educational and the intern is not doing work performed by regular employees, then it is exempt from minimum wage and overtime pay requirements.
The Government’s Six Criteria Test For Legally Unpaid Interns
Here are the six criteria per the Department of Labor. All six must be true for an internship to be legally unpaid.
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.
They’re a little confusing at first but basically they’re saying an unpaid internship should 1) be training oriented, 2) benefit the intern not the business, 3) not replace an employee, 4) not provide immediate value to the business, 5) not be a trial period for employment, and 6) both the business and the intern agree it’s unpaid.
What’s The Point Of Unpaid Internships?
Since all of my internships during college were unpaid, it’s strange for me to hear about students turning down internship opportunities simply because they’re unpaid. But why work for free if you can get paid right? And why spend your time working for a company that could be breaking the law?
Thinking from a business’s point of view, I have to wonder if there’s even a point for private sector for-profit companies to offer unpaid internships anymore. Reading the six criteria above, it sure doesn’t sound like it. Why take on unnecessary liability, although I’m sure some corporate lawyers would argue there’s enough gray area for interpretation in the criteria.
But we live in a country that loves lawsuits, and there have been many cases of unpaid interns suing their companies for wages. I think anyone willing to start their career off by suing a company for an unpaid internship is crazy, but there are a lot of folks out there who are really serious about abolishing free internships.
The Attacks On Unpaid Internships Are Changing The Job Market
The increases in regulation are changing the way companies approach their internship programs. Many businesses who don’t have the budgets to pay interns, are doing away with internship programs altogether to avoid unnecessary liability and costs. My company is just one example of a business that used to welcome unpaid summer interns, but won’t even touch them now with a ten-foot pole. I think that’s rather unfortunate.
We all know the job market is incredibly competitive these days. I interview a lot of candidates each year, and internships and work experience are the first thing I look at when I see a resume. If internships are offered less and less, it’s going to make it even harder for entry-level candidates to join the workforce. Some colleges even require their students to have internships during school. So how is that supposed to work if programs are getting cut?
Are Unpaid Internships A Thing Of The Past?
In my experience, unpaid internships were a right of passage during summer breaks. They were a way to experience a real office environment, and mine helped me get a better idea of what I wanted in my first full time job. A lot of what I did was educational, but I also definitely worked on tasks that were performed by regular employees.
I thought all of this was super cool; I wasn’t complaining or whining to anyone that I should have been paid for my time. And there’s no way I would try to sue for compensation if I were to do them all over again in today’s world. I was thrilled to be in an office environment and given some responsibilities. I owe a lot to my internships because I wouldn’t have been able to find my first full time job as quickly as I did if I didn’t have all of that experience on my resume when I graduated from college.
But change is generally a good thing, and if interns are able to get paid for their time, that’s awesome. Many surveys say that students who accept paid internships land higher paying jobs than those who accept unpaid internships too. A lot will depend on your educational background, the industry, and location too though.
Things To Clarify Before Accepting Any Internship
Personally I think the government meddles with too many things. I can understand where the Department of Labor is coming from, but I think companies should be able to define and offer whatever type of internship programs they want without fear of fines and lawsuits. If the internship program you want is intense and involves a lot of hours, why not get paid though right?!
In any case, here’s a list of things to clarify before you accept any internship, whether paid or unpaid. It’s always a good idea to know as much as possible before committing to anything career related.
1. It is fixed or open-ended duration?
2. Is there an opportunity for employment upon completion of the internship?
3. Are there any benefits available?
4. What are the minimum/maximum hours per day/week?
5. Will you have any new expenses (ex. travel) and are any of them reimbursable?
6. Can you receive any college credit?
7. What are the responsibilities and expectations?
8. Who will you be working/training with?
9. When was the internship program established?
10. Are there any eligibility requirements?
11. What type of training is involved?
Untemplaters, have you ever accepted an unpaid internship? What was your experience like? What are your thoughts on paid versus unpaid internships? Does your company currently have an internship program?
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Zee @ Work-To-Not-Work says
I understand why they have the laws that they do to pay interns that perform certain functions. It’s not 100% to protect the intern, it’s also there to keep businesses from abusing what they could view as free labor. My last employer would always talk about wanting to take on interns instead of temp workers so that it was “within our budget”.
We didn’t plan to teach the interns anything that we wouldn’t teach a temp worker or for that matter a brand new employee in our department. Sometimes there are employers that are just slimey and I think that laws like these are made to prevent these employers from a pool of free labor.
I do agree that experience is invaluable and unpaid internships can be useful, but unfortunately some people ruin it for everyone.
Naomi @ Rising Net Worth says
Looking back on my college experience I wish I would have taken the time to explore internships (either paid or unpaid would have been beneficial in my field). The thing that hindered me is the money. I took classes every summer with no breaks and also worked to pay the bills.
In my thought process was that placing myself in an full-time intern situation would have meant losing out on money which I definitely could not afford. I would advise any current college student to do any type of internship (in their field) that they can get their hands on! It doesn’t matter if I will push your graduation back a semester… just do it experience is key!
Financial Samurai says
Interesting. I never knew about the 6 regulations to require for unpaid internship. It’s all legalese and grey imo.
Imagine the unpaid intern getting pissed and going after the company. Well, there goes the intern’s chance of getting a job at the company, and probably the entire sector b/c the world is small!
If you got nothing, you might as well go the unpaid route for experience. Experience is more valuable than ANYTHING when you start at the bottom. When you are at the bottom, even if you are getting paid, you’re only making minimum wage.
But one thing I found out is that MBA interns get paid A LOT from some schools b/c some schools will match 1:1 what an employer will pay ie double income.