Stricter criteria needed for unpaid internships

A fine line exists between unpaid internships and exploitation of workers. This line is facing scrutiny as a result of recent court cases involving interns suing companies for violating labor and wage laws.

Most recently, two former interns sued Condé Nast, the mass media company behind Vanity Fair, Vogue, The New Yorker and several other publications. The interns pressed charges on the grounds that their internship with the company violated labor laws because they were paid less than $1 per hour.

The results of the litigation remain unclear, but the company recently announced its decision to cancel their internship program entirely.

Similar lawsuits have arisen from interns at other companies as well. Harpers Bazaar faced a suit from an intern who claimed to have worked 40 to 55 hour workweeks with no pay. That suit could not proceed to trial, but in an earlier case a U.S. District Court ruled that Fox Searchlight violated the minimum wage laws when the company did not pay interns who worked on the movie Black Swan.

All of these court cases leave the future of internships uncertain, which leaves unrest among young professionals preparing to enter the workforce. Many employers now look to hire people who have had practical experience in their field, and experience is nearly impossible to come by without internships.

Internships provide a valuable link between the theoretical knowledge gained from college classes and the practical application of this knowledge in the “real world” of business. If more companies follow Condé Nast’s example and shut down their internship programs to avoid a lawsuit, people entering the workforce will have fewer opportunities to gain experience and make connections in the professional realm.

In order for companies to continue to offer internships without fear of a lawsuit, the standards for unpaid internships need to be defined, well understood and sufficiently differentiated from paid internship opportunities.

‘Test for unpaid interns’

The U.S. Department of Labor has outlined six criteria that must be met by for-profit companies that wish to employ interns without pay. To pass the so-called “Test for Unpaid Interns,” a company must structure the internship so that it is similar to training given in an educational environment. The internship must be primarily for the benefit of the intern, and the employer can “derive no immediate advantage from the activities of the intern.”

Additionally, the intern cannot replace or displace regular employees, is not entitled to a job at the end of the internship and understands that he or she is not going to be paid for his or her time.

Essentially, unpaid internships function as an extension of the classroom. In college, students pay to attend classes where they hope to learn necessary skills to help them function capably in their career when they graduate. Unpaid internships can serve this same function outside the classroom by giving interns (or students) an inside look at their potential future job.

However, issues arise when unpaid internships take the format of full-time jobs. Dozens, if not hundreds, of companies offer semester or summer-long internships that operate just as any paid, 40 hours per week job, but they manage to pass the Department of Labor’s test by qualifying that applicants must be receiving college credit for their participation in the internship.

While receiving college credit technically places the internship within the legal parameters of unpaid experience, no clear distinction explains at what point or at what extent the line is crossed between providing an education and benefitting from the work of an unpaid employee.

Trend of discrimination

The grey area between work and education creates a problem in unpaid internships. Working 40 hours per week for no pay is not an economically viable option for many applicants, especially when they also must pay to cover the college credit they receive for the internship. They’re in the hole before they’ve even started.

Because many, arguably most, internship applicants cannot afford to take unpaid internship, a discriminatory trend develops.  The pool of applicants for an unpaid internship no longer becomes reflective of the actual diversity of the workforce. Those who cannot afford to sustain themselves without a steady income have the option to either accept the internship and work several other jobs (possibly amounting to 70 or 80 hour workweeks) to make ends meet, or they can find a paid internship or job somewhere else.

This leaves the applicants for unpaid internships largely to those who can afford to sustain themselves without pay—usually those who come from wealthy, upper-class families.

The easy solution is to argue that all internships should be paid. Paid internships would level the playing field, and would lead to greater diversity in the business world because jobs would be given based on merit and not on economic means. But requiring companies to pay their interns will undoubtedly result in more Condé Nast situations and ultimately cause more harm than good to the education of the up and coming workforce.

Instead of doing away with internships entirely, companies need to restructure internship programs that will work both to educate up-and-coming professionals in their desired field, and to shape and develop future employees. An ideal internship program creates a mutually beneficial relationship in which the intern and the company can share ideas.

The future of unpaid internships

So what does this mean for unpaid internships? One solution is to limit the number of hours per week that an intern can work for no pay. The U.S. Department of Labor, using cost of living statistics, should recommend a reasonable number of hours that a person could work while still having time to make enough money in outside jobs to cover his or her rent and living expenses (ideally without having to work 80 hours per week).

Instead of imposing nationwide restrictions, the Department of Labor could make suggestions based on the national cost of living average and leave the states to individually determine the extent to which unpaid hours should be limited.

By limiting the number of unpaid hours, interns could actually treat internships as they would treat a college class. No one class requires a 40-hour-per-week commitment, and many college students work outside jobs to pay for their education. Companies would still be able to offer an educational experience to unpaid interns without the interns feeling like their time and efforts are being exploited.

Additionally, working a limited number of unpaid hours would financially restrict fewer prospective interns. Having time to take on outside jobs would open the pool of applicants to a much broader spectrum. Giving more people access to more job experience will enrich both companies and the workforce as a whole.

Canceling internship programs does not solve any problems. Condé Nast set an unfortunate precedent in making it easier to eliminate the problem entirely rather than address the real heart of the matter.

Ultimately, internships play an important role for many in bridging the gap from college to career. Differentiating paid and unpaid internships as one would differentiate jobs from college classes will make expectations clear for both employers and interns. Tightening the criteria for unpaid internships will expand access to a broader group of interns and leave fewer feeling exploited.

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