There was a good article in yesterday’s New York Times about an issue I’m surprised has taken this long to be investigated: the possible illegality of unpaid internships. Apparently some people are finally getting concerned that unpaid internships at for-profit companies constitute free labor, and are therefore a violation of minimum-wage laws.

As it turns out, the Department of Labor has laid out six criteria for determining whether an internship can be legally be unpaid. The internship must:

1. Give training similar to what would be given in a vocational school or academic
educational instruction, even though it includes actual operation of the facilities of the
employer.
2. Be for the benefit of the intern.
3. Not replace regular employees with interns.
4. Give the employer no immediate advantage from the activities of the trainees/interns (and on occasion the employer’s operations may actually be impeded)
5. Not guarantee the interns a job at the end
6. Feature a mutual understanding by employer/intern that the intern is not entitled to wages for the time spent in training.


If all of these elements are true, the intern is not considered to be in an “employment relationship” with the employer, and need not be compensated. As you will notice, though, the standards are fairly strict, especially the “no immediate advantage” section. Nearly all internships carry some advantage for the employer, or else they wouldn’t be offered. The section is present because the guidelines were devised with vocational training rather than internships in mind, even though they apply to both (I have replaced the word “trainee” with “intern” in my use of the guidelines, to make it more applicable here).

The bottom line is that generally, unpaid internships by for-profit employers tend to be illegal. If you have accepted one for the summer, or are considering accepting one, know that your employer will be in violation of federal wage laws if you are not compensated for your time. You can file a wage complaint with the Massachusetts State Attorney General’s office here, or contact the U.S. Department of Labor’s Wage & Hour division here or at 1-866-4US-WAGE. And if you know that a for-profit employer (do keep in mind that these regulations only apply to for-profit companies, as non-profits can be volunteered at) is offering unpaid internships through Brandeis, it might be a good idea to talk to someone at Hiatt.

The exploitation of students desperate for work by corporations is not only reprehensible, but illegal. I’m glad state regulators are on the case, but we need to assist their work by finding these activities where they exist.

8 comments on “Labor Laws and Unpaid Internships”

  1. Alan Royals Says:

    yet another reason why minimum wage laws are a terrible idea

  2. NathanJRobinson Says:

    Precisely. Enslave the young!

  3. elly Says:

    Wow, this is very interesting.
    Thank you, I will totally tell my future employers this.

  4. Alan Royals Says:

    The young can get paying jobs if they want. If they prefer, they can get volunteer experience to put on a resume. At least that’s under the common system. Under the system you describe employers are disincentivized from offering such valuable experiences to young students.

  5. Alan Royals Says:

    edit- “common system” was intended to be “common sense system.” my bad.

  6. NathanJRobinson Says:

    The point is that employers are NOT offering “valuable experiences.” They’re getting students to do menial office work (envelope stuffing, filing, etc.) that they would otherwise have to pay someone to do. Even though the DoL regulations are strict, these new investigations would probably not have come about if employers were offering meaningful work to students. In that case, the relationship would be far more balanced. Employers receive help, students receive education. But the employers aren’t holding up their end of the bargain. Instead of worthwhile experience, all that a summer’s worth of unpaid toil provides is a single line on a resume.

    The choice you speak of, between unpaid but educational internships and paid but meaningless jobs, is therefore increasingly nonexistent. The point is that previously paid jobs are being turned into unpaid internships in order to save employers money, leaving students without the decision.

    I agree with you on principle. We shouldn’t make volunteerism illegal. But the law exists because it is in the interest of for-profit enterprises to exploit student interns rather than educating them. If companies behaved responsibly on their own, there would be no need for state intervention. But they’re not.

  7. Alan Royals Says:

    You express a nice sentiment, that the students actually get something out of what they’re doing.

    However,

    3)Not replace regular employees with interns- one of my best work experiences to date came when I was unpaid yet playing a critical role in progressive legal advocacy. What does it mean to replace a regular employee? Would this experience not have been an option?

    5) Not guarantee a job at the end- do they mean 100% guarantee? if they do, then it’s meaningless, as an intern always has the potential to mess things up badly enough to not get chosen. if they don’t, then the entire approach to getting legal jobs had changed- from talking to some friends in law school, it seems traditionally students during their second summer would try to not suck and if they do that get a job for after law school (in the current economy they have to do a little more than not suck, but the point remains).

    4) No benefit to the employer- I can’t imagine how this can be interpreted in any way that doesn’t disincentivize giving unpaid internships. If the other criteria are met- if the student is learning a whole lot, he’s not taking anyone’s job, he’s being treated well (other than the lack of pay, what’s the harm if there’s good? What if it’s a government agency directly benefiting the public rather than a private business? Or imagine a non-profit fighting for civil rights- if the intern is helping the advocacy efforts and is willing to work, who gets hurt? The public get the benefit of the services, the students gets the benefit of great experience and something to put on a resume and talk about at an interview.

  8. NathanJRobinson Says:

    I won’t defend the specific standards, which are flawed, dated, and badly in need of revision. I believe the article says that they’re from 1947, and they were written without the possibility of internships even in mind. You’re right that, as they’re written, if enforced fully they would prevent employers from offering numerous excellent internships.

    But the current round of investigations is being brought about by a desire to end exploitation using the standards rather than to enforce the standards in as strict a manner as possible for the sake of it. To that end, it’s important that people are informed of the protections that are available, so that the most egregious instances of exploitation can be prevented. If they have an excellent internship which mutually benefits both parties, it’s unlikely that they’ll file a labor complaint. Knowledge of the law is important for those (increasing) opposite instances, in which employers are simply taking advantage of students.

    So, yes, the standards are awful and need to be made more realistic. Your initial comment seemed to suggest that there was no need for any legal protections whatsoever, though. I couldn’t disagree more with that. There absolutely has to be some sort of regulation governing what work is to be compensated and what work can be done for free, or else desperate students will continue to be victimized by companies seeking to cut costs.