Intern Season: Unpaid No More?

As the weather grows warmer and friends begin planning summer weekend getaways, one thing becomes clear: Intern Season is near. Given the current state of the economy, Intern Season ain’t what it used to be, and many companies are attempting to fill normal positions with interns so that they can pay them less or not at all. In the finance world, summer was a 10-week time frame to woo prospective analysts and send them scampering around town trying to gain access to the hottest clubs, a rite of passage for the industry, really. Not all of my fellow students were so lucky, however, as most internships in politics, fashion, journalism, music, TV, etc. were, and still are, unpaid, leaving college kids in quite a bind— until now!

According to a NY Times article, someone at the Labor Department has taken the unpaid internship under severe scrutiny, which is long overdue.  Internships are now a staple of any resume, especially given that 83 percent of 2008 college grads held internships (versus 9 percent in 1992!). It seems to be quite a shocker that most students cannot realistically afford unpaid internships.  What part of that is shocking? As a finance intern, I had to borrow $3,000 (roughly 1000 percent of my college bank account) for summer housing. Fortunately my internship was paid, and paid well, so I could comfortably pay that back, but I have no idea how other students can afford unpaid internships unless they are receiving help from the Bank of Mom & Dad.

So finally someone has come to the rescue of unpaid interns, or at least laid the groundwork for the rescue. There are six federal rules that must be met in order for a for-profit company to offer an un-paid internship. The nature of these rules seem to be in creating an educational experience and developing the intern, instead of giving them all the crappy projects or mind numbing tasks some entry-level person didn’t feel like doing themselves. (Wait, that’s not what interns are for?! Who is going to get my tall skinny latte with sugar-free hazelnut?!?) Here are the unpaid criteria:

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 instruction;

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; and

6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

If all of the factors listed above are met, then the worker is a “trainee”, an employment relationship does not exist under the FLSA, and the FLSA’s minimum wage and overtime provisions do not apply to the worker.

I’m sure scores of employers will find their way around these rules due to lack of enforceability or an intern’s hesitance of turning them in for fear of being blacklisted in an industry. Whatever happens, minimum wage may be coming to interns nationwide— and that will help you buy all of a salad crouton in NYC.

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2 Responses to “Intern Season: Unpaid No More?”

  1. teresa kuklenski Reply April 6, 2010 at 8:20 pm

    I love your articles! All interns should be paid. We all need croutons.

  2. Go interns! I actually managed to make it through all my college years in paid or for-credit internships – and in NYC! Nice to know someone’s defending the rest of those abused 20 somethings.

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