Unpaid Internships: Foot in the Door or Stepping on a Landmine?

by Safani, Barbara Tuesday, July 06, 2010
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I was recently interviewed by CBS news about unpaid internships. There was a time when the only people who sought out unpaid internships were students who wanted to gain valuable work experience and were willing to forgo a salary to get it. But in today’s economy, more and more adults with long career histories are considering taking an unpaid internship as a way to get a foot in the door, transition into a new industry, learn a new job function, keep their resumes current, or update their skills.

But several states are concerned that in the current economy many companies are offering unpaid internships that are violating minimum wage laws. As a result, the Labor Department is more diligently investigating these practices and fining companies accordingly.

Many employment and labor attorneys believe that the number of unpaid internships are growing due to the lack of available paid opportunities and the fact that companies are stretched thin and unpaid interns are seen as a way to increase staff and productivity without increasing expenses.
But legal experts warn that these practices could be illegal. The Department of of Labor looks at six criteria to determine if the internship is in compliance with wage and hour rules. The requirements are:

1. 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 institution.
2. The training is for the benefit of the trainees.
3. The trainees do not displace regular employees, but work under their close observation.
4. 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.
5. The trainees are not necessarily entitled to a job at the conclusion of the training period.
6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

Yet despite these criteria, not all companies seem to be aware of them. Employers who make a good faith effort to allow interns to work for free could end up owing them back pay.

In other cases, employers may be aware of the federal rules, but choose to ignore them. Many legal experts claim unpaid internships are widespread in the fields of fashion, publishing, journalism, law firms, and public relations firms. The bottom line is that if you are considering taking an unpaid internship, proceed with caution and know your rights.