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Crackdown on Unpaid Interns

Internships have long presented opportunities for students and recent graduates to obtain practical education in their chosen professions and valuable experience to enhance their resumes. Employers have long benefitted from the unpaid help of those same interns.

In the headlines is the story of a New York State Court case just decided that may change the rules for internships going forward. (See the NPR Article) According to Time Magazine in The Beginning of the End of the Unpaid Internship, internships have been around dating back to the mid-1800’s, primarily in the medical field, (the precursor to modern residencies), but internships  became more widely used in the 1970’s and 1980’s. The National Association of Colleges and Employers reported that approximately half of all college graduates in 2008 held an internship. Employers, of course, have taken advantage of the unpaid labor, especially in the recession years, but internships also benefit neophytes trying to gain experience in a tough job market where employers are reducing payroll, getting by with less, requiring more out of their employees and not hiring people without experience.

The issue seems to cross political lines. The New York case that has catapulted the issue to national news involved interns suing conservative Fox News. Liberal non-profit organizations, government agencies and civil justice organizations, however, are well known for their use of unpaid interns. (See Unpaid Internships Lawsuit 2013: Dear Liberal Nonprofits — Pay Your Interns!)

No doubt some employers have abused the use of unpaid interns.  Employers have used interns as a way to get work done for which they would otherwise have paid employees, and perhaps all the more in recent difficult economic times. Time Magazine quotes Ross Perlin, author of Intern Nation, as follows: “I think we may be at the very early stages of a significant backlash against an internship phenomenon that has gone off the rails.”

Although the extensive use of interns in business is apparently a modern phenomenon, the Fair Labor Standards Act was passed into law in 1938 and includes the following standards for interns:

  1. The internship must be similar to training that would be given in an educational environment;
  2. The internship must be for the benefit of the intern;
  3. The intern does not displace regular employees;
  4. The employer derives no immediate advantage from the intern;
  5. The intern is not entitled to a job at the end of the internship; and
  6. The intern understands that he or she is not entitled to wages.

These standards have not changed. What seems to be changing is the attention being given to internships. The New York case ruling really does not break any new ground in the law; it focuses attention back on the standards that have been in place for many years. Employers who make use of interns should take notice and review the company policies to be sure they comply with the Department of Labor standards that are laid out in the Fair Labor Standards Act.