Unpaid Internships: The Age of Reckoning.


Internship or Free Labor?

“Hey, you wanna work for free?” We have all heard the off-handed pitch for some plum internship position. One of these unpaid “jobs” may even appeal to you, whether you see it as an opportunity to get your “foot in the door” in your chosen career or as a nice little fluffer for that competitive resume that will set you apart in today’s difficult job market. These offers come in all shapes in sizes. Maybe it’s the chance to work as a producer in training for a favorite TV news program, or it could be an enticing P.A. job on some swanky Hollywood movie set.

Whatever the offer, there are few things you should know before you consider taking the gig. An unpaid internship is only permissible under certain fairly strict conditions. When workers are unpaid, they are not permitted to be used as “workers.” The positions are intended only to allow a student to shadow an employee to learn about how that job is performed. This restriction does not apply to not-for-profit companies. The law allows volunteer workers in charity work. Therefore, this posting discusses only those working within for profit businesses.

The Department of Labor is beginning to focus on these employers, taking them to task for exploiting the internship exception. Federal law requires an employer to pay all of its workers nothing less than the prevailing minimum wage of $7.25, although there are some states that have mandated a higher minimum (in some cities, the minimum wage is higher still. San Francisco, for example, mandates a minimum wage of $10.24 per hour). Contrary to what some employers believe, minimum wage requirements cannot be circumvented by using the magic word “intern.”

DEPARTMENT OF LABOR guidelines for an internship decoded:

The Department of Labor has issued guidelines to be followed in determining whether an unpaid internship is permissible. We will consider and explain each of those guidelines here.

1. The internship is similar to training given at an educational institution. Are you *training* this intern in the same way they would be trained or educated at a university, technical program, or weekend seminar? Do they show up for classes, or do they show up to do productive work for your business?

The law says that anyone who is really learning on the job, as if they were taking college-level instruction in the workings of that job, is exempt from payment. The exemption is based on the idea that the employer is giving them instruction instead of work to do.

2. The internship experience is for the benefit of the intern. Not for the benefit of [the Company] . The point of the internship must be just like any other education or training – to further the intern along in their career development. Not to provide a service to [the Company].

Employers are not permitted to “hire” an intern merely to avoid paying a regular employee a fair wage, whatever the nature of that work. If an intern is simply being given the workload that would normally fall to an employee, virtual assistant, web designer, or other paid person, then the employer is almost certainly in violation of the law .

3. The intern does not displace regular employees, and works under close supervision of existing staff.

No company is permitted to “hire” free labor to displace regular workers. Labeling any worker an “intern” doesn’t relieve the employer of its obligation under the law. An intern is meant to be in a primarily educational relationship that provides little to no benefit to the employer.  If the work should be done by a full-time employee instead of the intern, it’s not an internship. The easiest way for anyone who is in such a position to determine if it is a legitimate internship, is to examine what he or she is doing day-to-day. Are you the only one responsible for the tasks assigned you with little to no supervision? [Mostly working] Or do you have a mentor supervising your every move, teaching you how to perform these tasks at every step of the way? [Mostly learning] If it is the latter, you are an intern. If it is the former, you are being unlawfully denied fair wages.

4. The employer derives no immediate advantage from the activities of the intern, and is occasionally held back. It’s okay if you get a tiny (de minimis) benefit from the intern’s work (such as the intern took out the trash once). But overall, the intern is more of a cost than a benefit to you.

As with number three, above, the red flags are obvious. If you are doing a job rather than learning one, it’s not an internship and you should be paid. Interns should be taught, not required to provide useful work flow. When your supervising employee has to take time out to benefit you, rather than you rushing to get a task done for the employer, you know you are in a legitimate internship position.

5. The intern is not necessarily entitled to a job at the conclusion of the internship. You can’t start someone as an unpaid intern and then hire them as an employee or independent contractor when they “work out.” If you want to do a trial period (which can be a great idea for any new worker), it must be paid. The Department of Labor also recommends that the internship be of a predetermined, set duration, similar to any class or training program.

This requirement is fairly self-explanatory and easy enough for the intern to determine. A six-week “tryout” period where you are “interning” before being hired: Not okay. Nor is a nebulous period of time serving as an unpaid trainee “intern” before you may or may not be “put on full time.” But a six-week teaching internship, where you are given the full benefit of the experience and knowledge of your training supervisor is most likely legitimate.

6. The employer and intern understand that the intern won’t be paid. Best practice is that this is per a written agreement. As I said, this is just *one factor* – even if both of you agree that this is an unpaid internship, it’s a violation of the law unless the five other criteria also apply.

This rule goes without saying, but many people in this economy are willing to let an employer take advantage of them in order to get that plum job experience an internship can offer on his or her resume. They may have agreed to work for nothing in exchange for the learning experience that is to be had “on the job,” regardless of whether or not it is legitimate. While such a position is certainly understandable in such a competitive market, the more people who come forward and speak out against this kind of predatory hiring, the more likely these internships will become paid, at least at the very modest scale of the national minimum wage.

The bottom line is that we all should speak out when working people are disadvantaged, even if they have agreed to be. If we allow employers to abuse the laws that are in place for the protection of the American worker, everybody loses. Students who should be learning should not serve instead as poorly trained office workers. A well trained work force should always be the goal, and that cannot be achieved if people are thrown in the deep end merely to save The Man a few bucks on payroll.

Should you currently be serving as an unpaid intern in one of the scenarios above, and wish to explore your remedies under the law, please call Lazear Mack at 510-735-6316. We are here to help.

Lazear Mack, LLP
Employment Law Attorneys
436 14th Street, Suite 1117
Oakland, CA


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