Posted July 31, 2013 by

Are unpaid internships coming to an end?

Female business intern holding a clipboard

Female business intern holding a clipboard. Photo courtesy of Shutterstock.

Consider these three interrelated pieces of prevailing wisdom:

1.    It’s a competitive job market.
2.    Gaining experience to put on your resume can help you get a job.
3.    Unpaid internships may put a strain on your finances, but will help your career in the long run.

Each year, approximately half a million career-builders work as unpaid interns with the hope of future career growth, while businesses reap the free benefits of motivated workers eager to impress.

But don’t resign yourself to becoming one of those thousands quite yet: A recent court decision has opened the question of whether unpaid internships will become a relic of the past.

It started like this. Eric Glatt, a 42-year-old man with an MBA, was working in the financial industry and decided to make a career change. He took on an unpaid internship with Fox Searchlight Pictures for some on-the-job training in the film industry. Alex Footman, a 24-year-old college graduate who had majored in film studies, wanted to get a foot in the door, and similarly worked as an unpaid film production intern.

The two men made coffee, took out the trash, cleaned the offices, answered phones and assembled office furniture. They worked hard, earned nothing and learned little in these dead-end internships. Meanwhile, the film, “Black Swan,” earned more than $300 million in revenues.

“I did all the normal job functions that an accounting clerk does,” Glatt told the Huffington Post in a video interview. “There was nothing about my internship that was an internship, it was a job.”

Taking it to the courts

Thousands of unpaid interns have similar experiences. But most don’t realize that there are well-defined labor laws that regulate their internships.

When Glatt saw a pamphlet printed by the Department of Labor, he suspected that his internship wasn’t legal, and he and Footman filed a lawsuit.

They were right. On June 11, 2013, a federal judge ruled that Fox Searchlight Pictures had violated minimum wage laws by not paying the two production interns. The judge ruled that Glatt and Footman should have been paid because they acted as regular employees.

What the law says

Internships are regulated by the Department of Labor, which specifies that unpaid internships must meet the following six criteria:

1.    The internship must be similar to the training that would be given in an educational environment.
2.    The experience must be for the benefit of the intern.
3.    The intern cannot displace regular employees.
4.    The employer that provides the training gets no immediate advantage from the intern’s activities.
5.    The intern is not necessarily entitled to a job upon completion of the internship. (Learn how some are turning internships into jobs.)
6.    The intern and employer understand that the intern is not entitled to wages during the internship period.

Some claim that few unpaid internships actually meet these criteria.

Ross Perlin, author of “Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy”, told Fox Business News that the internship system “has gone off the rails” over the last few decades. He said that employers save around $600 million annually by using interns as a cheap disposal labor force.

In fact, the judge ruling in the lawsuit said that unpaid internships should only be allowed in limited circumstances.

The future of unpaid internships

Does this mean you’ll stop seeing recruitment ads from companies offering you lots of experience and no pay? Not necessarily. But it does mean that businesses will need to rethink their internship programs if they are unpaid.

Francine Breckenridge, a labor and employment attorney at the law firm Strasburger, told Fox Business News that the “potential fines and bad press that comes along with a violation of labor laws might not be worth the risk,” especially for smaller companies.

This could lead to fewer unpaid internship opportunities, but it may also mean that companies will return to the intent of the unpaid internship: an educational opportunity akin to vocational training, which benefits the intern.

What this means for you

If your dream is to work as an intern on Capitol Hill or for Greenpeace, you’re probably not going to get paid for it. Ever. The government and not-for-profit organizations are exempted from the Department of Labor internship regulations.

But if you’re trying to break into the entertainment or fashion industry, or just gain some on-the-job experience, review your options carefully. Assess the internship’s educational value. Talk to others who have interned with the company. Read this Q & A from ProPublica to find out what’s legal and what isn’t. And if you’re working as an unpaid intern and have concerns about your situation, check out these resources from Intern Labor Rights.

Unpaid internships aren’t necessarily coming to an end. But the writing is on the wall for companies that seek to cut their bottom lines from an exploited workforce.

By: Greta Brewster

About the Author:

Greta Brewster is a freelance writer and non-profit consultant.

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