Authorities crack down on unpaid internships

| Staff Reporter

Information obtained from the Career Center Annual Report 2008-2009

The number of unpaid internships has been rising steadily throughout the nation, resulting in a crackdown on firms by federal and state regulators who worry that employers are abusing the nature of unpaid internships to gain free labor.

While there is no official database tracking the number of paid versus unpaid internships available, many are beginning to notice trends.

Lance Choy, director of the Career Development Center at Stanford University, noted that employers posted 643 unpaid internships on the Stanford job board this academic year, which is more than triple the 174 postings from two years ago.

These postings span across all industries, from those that are traditionally notorious for not paying interns, such as entertainment, to formerly generous industries such as banking.

The source of this trend? None other than the 15 plus million college students across the United States.

Since college students are strongly encouraged to explore opportunities in their fields of interest, employers have been taking advantage of this opportunity to offer unpaid internships, slashing costs in this precarious economy.

While these exchanges between eager industries and students may benefit both parties, some federal and state officials are convinced that unpaid internships violate minimum wage laws such as the Fair Labor Standards Act.

According to this federal law, internships can only be unpaid if they primarily benefit the intern and satisfy all of the following criteria: The internship should be similar to the training given in a vocational school or academic institution, the intern must not displace regular paid workers and the employer can “derive no immediate advantage” from the intern’s activities.

No matter how explicitly this act is written, however, it remains difficult to enforce.

“It is very difficult to determine when an employer is offering a legitimate internship that provides experience and training that primarily benefits the intern as opposed to using the internship as a cover for getting free labor for its own benefit,” Washington University law professor Pauline Kim wrote in an e-mail to Student Life.

Not only do unpaid internships potentially violate federal law, they also discriminate against financially disadvantaged students.

“Many students of limited means cannot afford to perform unpaid internships but instead must perform paid work in a low-waged setting to make ends meet,” said Marion Crain, Wiley B. Rutledge Professor of Law at Wash. U.

“The internship experience tends disproportionately to benefit middle and upper class students,” she added.

To address the problem of unpaid internships, experts recommend that the federal government closely scrutinize this area to avoid discrimination and economic exploitations, particularly of the most vulnerable workers.

Without such public scrutiny, individual firms would not have the incentive to self-regulate in this regard, according to Crain.

Regardless of whether or not unpaid internships actually violate the law, this problem troubles many students who seek to intern.

“Interns definitely deserve to be paid since they are doing work for [the firms],” sophomore Joyce Fung said.

Junior Theja Lanka voiced similar financial concerns. “If my living expenses won’t be covered, then what’s the point?” she said.

In the meantime, what can students do? When offered unpaid internships, students may seek alternative venues of compensation, such as receiving academic credits or applying for stipends for housing or living expenses from either the industries or external sources.

For example, the Career Center at Wash. U. offers a limited number of stipends of up to $3,000 for students who have secured unpaid internships, but have already exhausted the six academic credits toward internships that they are allowed to receive.

If students cannot obtain alternative venues of compensation, they may also explore areas outside their primary interests for potentially paid internships.

“We also want to encourage students to take advantage of other strengths or abilities that they have within internships and think more broadly about opportunities that they could be further engaged in,” said Michael Chapin, career development specialist at the Career Center.

Even if financial factors continue to be problematic, the Career Center still highly encourages students to pursue internships because of the valuable experiences they provide.

“The earlier students can [intern] and develop their professional skills, learn about who they are, develop their career and academic interests, the more prepared [they are] for steps after graduation,” Chapin said.

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