38% of Internships With Corporations May Violate Fair Labor Standards Act

Marilyn Mackes of NACE

Nearly two-thirds of graduating seniors from the Class of 2013 took part in an internship or a cooperative education assignment during their years pursuing a bachelor’s degree, according to results of a survey of college students by the National Association of Colleges and Employers (NACE). NACE’s 2013 Student Survey found that 63.2 percent of graduating seniors from the Class of 2013 reported having taken part in an internship, co-op, or both. “This represents the highest overall participation rate since we began tracking this with the Class of 2007,” says Marilyn Mackes, NACE executive director. That’s the good news and, by way of context, only 57 percent of the Class of 2008 reported having  taken part in an internship, co-op, or both.

More than half of internships by Class of 2013 graduating seniors were performed at for-profit, private-sector organizations (56.3 percent). The remaining internships were undertaken at nonprofits (28.1 percent) and state, local, or federal government agencies (15.7 percent).

An overwhelming percentage of paid interns—72.9 percent—worked in the for-profit, private sector, while 16.4 percent worked for nonprofits and 10.6 percent worked for state, local, or federal government agencies. However, among unpaid internships, a disturbing 38.1 percent were conducted in the for-profit, private sector; these internships, and the organizations that offer them, are subject to the Fair Labor Standards Act (FLSA). As has been widely reported, a recent court ruling on unpaid internships at an entertainment organization held that the organization had violated the FLSA and should have paid its interns. In short, it is quite likely that all unpaid internships are illegal when those interns are employed by for-profit organizations. The FLSA regulations, by the way, specifically exempt internships for non-profit organizations and government agencies. Some 40.7 percent of internships with for non-profits and 21.2 for government agencies.