Unpaid Internships: What Are Your Rights?

A few weeks ago, I wrote about the wave of legal action being taken against unpaid internships. While it is confined to one industry (the media industry – specifically a TV program, a magazine, and a movie studio) and there are some questionable issues with the lawsuits, it nonetheless brings up some legitimate concerns.

Justice sends mixed messages

Are Unpaid Internships Legal?

The simple answer to the whether or not unpaid internships are legal is yes, they are legal. This is because there are no laws against unpaid internships. Of course, the issue is more complicated than that.

The Fair Labor Standards Act (FLSA) establishes standards in the areas of minimum wage, overtime pay, and youth employment for full-time and part-time workers in the private sector and in Federal, State, and local government. In regard to unpaid internships, the US Department of Labor defined criteria, from an FLSA perspective, for determining whether or not an employment situation exists with an internship in the private sector (i.e. with a for-profit business/organization). If it is not deemed to be employment but is a true training opportunity, then it can go without pay.

But these are only criteria, not laws.

The “Test” for Unpaid Internships

An unpaid internship with a for-profit employer must meet ALL of the following six criteria:

  1. The work of the internship must be similar to training you would receive in the classroom.
  2. The internship is for YOUR benefit (as in you, the intern).
  3. As an intern, you can’t displace regular employees.
  4. The employer cannot gain immediate advantage from your work as an intern.
  5. As an intern, you are not necessarily entitled to a job at the end of the internship.
  6. Both you, the intern, and the employer understand that you are not entitled to pay during the internship period.

If all of these criteria are met, then there is no employment relationship and the minimum wage/overtime provisions of the FLSA do not apply. In other words, you don’t have to be paid for your work.

Honestly, this “six-prong test” is a tricky one, and no one is really monitoring the situation. Therefore, it is up to you to use your best judgement and run your own six-prong test when considering an unpaid internship.

Students’ Internship Rights

So while you might not have any legal rights when it comes to unpaid internships, there are still ethical standards that protect you. From my perspective, here are the issues to be mindful of as you consider an unpaid internship.

  • Credit alone does not make an internship experience comparable to training in an educational environment. One of the common ways employers in the for-profit sector will skirt around the issue of pay is to require you to earn credit. They figure that doing so satisfies that first criterion (of course forgetting that they still have five others to meet). The thing is that you can earn credit for a bad internship just as you can for a good one. Even better are the companies that claim that they can offer you credit and that the credit is compensation. First, an employer can’t award you credit; only a university can. Second, you actually have to pay money to enroll in a credited internship course. Earning credit and earning actual money are not equal forms of compensation.
  • Most employers offer internships for their own benefit. Let’s be honest: Why would an organization spend valuable time vetting, hiring, training, and supervising student interns if they derived no benefit at all? While I do believe that employers hope their interns learn from the internship experience, it is not likely that this is their primary reason for offering the position. The internship is not solely for your benefit. And given the short-term nature of an internship, most employers are probably hoping to gain some immediate advantage from the work you are doing.
  • Be aware that the same “rules” do NOT apply to non-profits. It is ironic that one of the biggest perpetrators of unpaid internships is government, the same folks responsible for and covered under FLSA and who essentially created the related internship criteria. From my perspective, unpaid internships in the non-profit sector aren’t entirely wrong, but they can be abused more easily because of different rules.

As a student, it’s important to understand the criteria provided by the US Department of Labor. This knowledge isn’t so you can go out and take action against questionable unpaid internships, but it’s helpful as you evaluate your internship options.

Next week, I’ll write more about evaluating unpaid internships and determining whether or not an unpaid position is “acceptable.”

Photo by Dan4th Nicholas