Many interns probably should be paid at least minimum wage

9 Dec

In Interns: the new indentured servants? Moi wrote:
When one thinks of interns, one usually thinks of an eager young undergraduate trying to make a favorable impression on a future employer. Steven Greenhouse reported in the New York Times that in the article, The unpaid Internships, Legal or Not
The question is whether employers caught in a vice between declining revenue and rising costs are using internships as a source of labor without having to comply with labor regulations?
Steven Greenhouse did a follow-up article which reported about new labor regulations from California. In California Labor Depart. Revises Guidelines on When Interns Must be Paid Greenhouse reports in the New York Times about the California rules.
Greenhouse explores an even more troubling trend in his New York Times article, With Jobs Few, Internships Lure More Graduates to Unpaid Work.
Before accepting an internship, the potential intern should ask some questions.

Susan Adams of Forbes asked in the article, Is the Unpaid Internship Dead?

The rash of suits is leading some lawyers who represent employers to advise their clients that they should either shut down their internship programs or start paying a minimum wage. “The legal standards have always been challenging for employers who use unpaid interns,” says Daniel O’Meara, chairman of the employment law division of Philadelphia-based Montgomery, McCracken, Walker & Rhoads. “Now that there is an increased awareness among interns, and more importantly, among plaintiff lawyers, the likelihood of a challenge to an unpaid internship is dramatically higher,” he adds. “Given a choice between using unpaid interns and litigating, or not using the intern, most employers will not use the intern.”
Jeffrey Landes, a partner at New York’s Epstein, Becker & Green, which also represents employers, agrees. “We tell our clients that it’s not prudent to have an unpaid internship program,” he says. “They should pay minimum wage and you could also have some liability for overtime.”
One way companies try to protect themselves from legal challenge is to hire student interns who get credit from school while they are on the job, since a school’s stamp of approval can bolster the idea that the internship counts as educational training that benefits the intern. Often students must write papers about their experiences and attend an academic seminar about what they are learning. But Justin Swartz, an Outten & Golden partner who worked on the Fox Searchlight and Condé Nast cases, says that non-paying internships for credit can still run afoul of the law if the student is doing “productive work” for the employer. At Forbes we have used journalism students who accumulate academic credit while they work for us, usually less than 20 hours a week. These are not always the best arrangements for students, because they have to pay their schools for the academic credit, which can come to thousands of dollars per term.
As I was reporting this story, I felt torn about whether interns should be able to choose to work for little or no pay—call it volunteering rather than interning–to beef up their résumés and make contacts, even if the experience includes drudgery. Certainly the New Yorker intern was learning marketable skills that would have been impossible to get in a classroom. And what about that old concept of paying dues? Plaintiffs’ lawyer Swartz set me straight: “The law says that when you work, you have to get paid,” he says simply. In other words, you should get paid to pay your dues.
I can’t argue with that, though I find O’Meara’s prediction chilling: Instead of paying interns, many employers may decide to eliminate internship program altogether “and just tell everyone to work a little bit harder.”
At least some employers have decided to pay their interns rather than axing their programs. Fox Searchlight has changed its policy and now pays its interns. NBC News started paying its interns as of this January. Let’s hope that internships in the creative fields continue and that employers find a way to pay at least a minimum wage.

Here are the rules for hiring interns under The Fair Labor Standards Act:

U.S. Department of Labor
Wage and Hour Division (April 2010)
Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act
This fact sheet provides general information to help determine whether interns must be paid the minimum wage and overtime under the Fair Labor Standards Act for the services that they provide to “for-profit” private sector employers.
The Fair Labor Standards Act (FLSA) defines the term “employ” very broadly as including to “suffer or permit to work.” Covered and non-exempt individuals who are “suffered or permitted” to work must be compensated under the law for the services they perform for an employer. Internships in the “for-profit” private sector will most often be viewed as employment, unless the test described below relating to trainees is met. Interns in the “for-profit” private sector who qualify as employees rather than trainees typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek.
The Test For Unpaid Interns
There are some circumstances under which individuals who participate in “for-profit” private sector internships or training programs may do so without compensation. The Supreme Court has held that the term “suffer or permit to work” cannot be interpreted so as to make a person whose work serves only his or her own interest an employee of another who provides aid or instruction. This may apply to interns who receive training for their own educational benefit if the training meets certain criteria. The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances of each such program.
The following six criteria must be applied when making this determination:
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.
If all of the factors listed above are met, an employment relationship does not exist under the FLSA, and the Act’s minimum wage and overtime provisions do not apply to the intern. This exclusion from the definition of employment is necessarily quite narrow because the FLSA’s definition of “employ” is very broad. Some of the most commonly discussed factors for “for-profit” private sector internship programs are considered below.
FS 71Similar To An Education Environment And The Primary Beneficiary Of The Activity
In general, the more an internship program is structured around a classroom or academic experience as opposed to the employer’s actual operations, the more likely the internship will be viewed as an extension of the individual’s educational experience (this often occurs where a college or university exercises oversight over the internship program and provides educational credit). The more the internship provides the individual with skills that can be used in multiple employment settings, as opposed to skills particular to one employer’s operation, the more likely the intern would be viewed as receiving training. Under these circumstances the intern does not perform the routine work of the business on a regular and recurring basis, and the business is not dependent upon the work of the intern. On the other hand, if the interns are engaged in the operations of the employer orare performing productive work (for example, filing, performing other clerical work, or assisting customers), then the fact that they may be receiving some benefits in the form of a new skill or improved work habits will not exclude them from the FLSA’s minimum wage and overtime requirements because the employer benefits from the interns’ work.
Displacement And Supervision Issues
If an employer uses interns as substitutes for regular workers or to augment its existing workforce during specific time periods, these interns should be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek. If the employer would have hired additional employees or required existing staff to work additional hours had the interns not performed the work, then the interns will be viewed as employees and entitled compensation under the FLSA. Conversely, if the employer is providing job shadowing opportunities that allow an intern to learn certain functions under the close and constant supervision of regular employees, but the intern performs no or minimal work, the activity is more likely to be viewed as a bona fide education experience. On the other hand, if the intern receives the same level of supervision as the employer’s regular workforce, this would suggest an employment relationship, rather than training.
Job Entitlement
The internship should be of a fixed duration, established prior to the outset of the internship. Further, unpaid internships generally should not be used by the employer as a trial period for individuals seeking employment at the conclusion of the internship period. If an intern is placed with the employer for a trial period with the expectation that he or she will then be hired on a permanent basis, that individual generally would be considered an employee under the FLSA.
Where to Obtain Additional Information
This publication is for general information and is not to be considered in the same light as official statements of position contained in the regulations.
For additional information, visit our Wage and Hour Division Website: and/or call our toll-free information and helpline, available 8 a.m. to 5 p.m. in your time zone, 1-866- 4USWAGE (1-866-487-9243).
U.S. Department of Labor
Frances Perkins Building
200 Constitution Avenue, NW
Washington, DC 20210
TTY: 1-866-487-9243
Contact Us

The FLSA makes a special exception under certain circumstances for individuals who volunteer to perform services for a state or local government agency and for individuals who volunteer for humanitarian purposes for private non-profit food banks. WHD also recognizes an exception for individuals who volunteer their time, freely and without anticipation of compensation for religious, charitable, civic, or humanitarian purposes to non-profit organizations. Unpaid internships in the public sector and for non-profit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible. WHD is reviewing the need for additional guidance on internships in the public and non-profit sectors.

Before accepting an internship, the potential intern should ask some questions.

Scholarship. Com has some great questions for undergraduates in the article, With Jobs Few, Internships Lure More Graduates to Unpaid Work

When do I want to be an intern?
Most internships will last either a semester or a summer. It’s up to you to determine how much time you’re willing (and able) to take off from school to take on an internship, and when you’re able to take that time away from your academics. Summer internships will be more competitive, as more apply for those.
Can I afford to take an unpaid position?
Unfortunately, many internships out there, especially those in the communications and arts fields, are unpaid. You’ll need to ask yourself then whether you’re able to take on the added expense of an unpaid internship, as you probably won’t have time to hold down a full-time paying job in the meantime.
How independent am I?
Depending on the position, you’ll either have a lot of guidance or a lot of autonomy when it comes to your internship experience. If you know you’d like a bit more freedom, consider internships that come with some room to make that experience your own. If you know you’d like more guidance, and perhaps a mentor, find positions that would offer you that.
Will this experience help me down the road?
Outside of the obvious benefit of padding your resume, the right internship can also be your foot in the door of your chosen industry once you’ve graduated. The people you meet while at your internship may also be good contacts to have once you’re out there on job market looking for a paid full-time position.
Do I need an internship related to my major?
An internship can either reinforce your interest for your chosen field of study or could serve to give you some experience in an area you had not considered before. While you should certainly look for positions related to your major if you’re sure you’ll be sticking with that post-graduation, if you’re not sure, it may make sense to broaden your search.
What have former interns said about this position?
While an internship may seem great on paper and even better during an internship interview, you may not get an honest assessment of the experience until you talk to former interns. If the internship provider balks at the request, talk to your college’s career center; certainly there’s someone from your school who has worked with that provider in the past.
Am I willing to look beyond my city, even state, for an opportunity?
Depending on where you’re attending college, there may be better opportunities elsewhere in terms of internships, especially if you live in a college or small town with fewer internship providers. Think about whether you’d consider internships outside of your campus bubble; the competition may also be less fierce elsewhere.
Does this opportunity come with any additional benefits?
Some internships will offer a modest salary or stipend. Others may offer mileage or travel reimbursements or insurance outside of a traditional paycheck. Think about what would sweeten the deal for you and what your priorities are when looking for an internship.
Do I need academic credit?
Some internship providers will only accept applicants looking for college credit in exchange for their work there, especially if the experience is unpaid. Your college may have similar requirements for internships, so make sure you do your research to know whether you’re eligible or interested in an internship that offers academic credit.
What kinds of responsibilities will I have at this internship?
This is an important question to ask, even before you meet with the internship provider at an interview. Unless you’re just looking for any kind of experience to pad your resume with, you probably want to know what you’ll be doing day in and day out at your internship, and whether the job fits with what you’d like to do after graduation.

For the college graduate, the questions will focus on what skills are developed in the internship which will assist the intern in securing employment.

In a tight economy, people are desperate for just about any type of opportunity. Don’t let this desperation play into the avarice of an employer who sees the potential intern as unpaid labor with no thought of providing either training or a path to a permanent position.
This seemingly innocuous issue is a real sleeper.

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