Be Aware Of Labor Laws Before You Decide To Hire An Unpaid Intern
from the save-now,-pay-more-later dept
Many companies have long been taking advantage of young, bright-eyed students and recent college graduates who are eager to work for nothing (or practically nothing) in the hopes that their work experience will eventually land them their dream job. But is it legal for a for-profit company to not pay a full-time intern? Talk to your lawyer, but generally, the answer is no. Only government and non-profit organizations are allowed to use unpaid interns without worrying about breaking the law. Given the rampant (ab)use of unpaid interns during this recession, the Department of Labor is starting to crack down on employers who don't pay their interns fairly. The confusing part, though, is that labor laws are somewhat outdated and open to interpretation.The six federal legal criteria that must be met in order to hire an unpaid intern are based on a 1947 Supreme Court decision about whether the Fair Labor Standards Act (FLSA) was applicable to prospective train yard brakemen. (Hmm. When was the last time you heard about a good train yard internship?) Under the current FLSA, employers can hire an unpaid intern if all of the following conditions are met:
- The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school or academic institution. The idea here is basically that any work should be for training purposes only -- not for the sake of getting real work done at the company.
- The training is for the benefit of the trainee. This is generally true. Interns are happy to work for no pay if it means that in the end, they can put a company's name on their resume or even get a paid full-time job at the company.
- The trainees do not displace regular employees, but work under close observation. This implies that interns shouldn't be doing actual work that might displace a paid employee.
- 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. When doesn't an employer gain an advantage from having an intern? This is where many companies can get into trouble. The definition of "immediate advantage" leaves a lot of room for interpretation.
- The trainees are not necessarily entitled to a job at the completion of the training period. Companies often use internships as "working interviews" where the intern is hired as an employee after the internship is over if they perform well.
- The employer and the trainee understand that the trainees are not entitled to wages for the time spent in training. This is generally not a problem, since both parties should agree to the scope of the internship.
The upshot of all this, though, is that unpaid interns have hidden costs and liabilities -- which can be significant. Labor laws seem to favor the benefit of the intern and seem to frown upon companies that might be trying to just get free labor. But besides running afoul of labor laws, unpaid interns without proper supervision can also come back to haunt employers, especially when interns represent the company and are trusted with interacting with clients. Add the Department of Labor looking into the issue, and there are even more reasons to double-check and make sure internship programs make sense.
What has your experience been with internship programs and training interns? What are your motivations for offering intern positions? Do you think labor laws need to be adjusted to reflect more current trends in the workforce? Tell us what you think in the comments below.
Filed Under: employers, internships, labor
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Pay - Cost = $0.00
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Workers Comp
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Implication
I took a paid internship when I was in college, but I was also pretty damn qualified at the time that I did so and the demand for us was greater than the supply. However, the education and references would have paid for themselves. It does seem quite foolish for the government to attempt to screw over those prospective employees that are either in too much supply or too unqualified to be worth a paid internship, thereby depriving them of valuable experience. Like I said above, it is basically just another form of minumum wage, which really just increases unemployment for many in order to marginally increase the wages of fewer.
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aww but it costs so much to train min wage earners
that's what its about , wow that was short and easy
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@2 yea ok
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Change the Laws
So change the law to allow unpaid interns to do anything and everything they are willing to do for no money. Require that interns receive employment benefits that full timers get so that they aren't totally abused.
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Varies by Industry
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I've only been on the receiving end of an internship (called a co-op around here). My college requires all students to complete 3 semesters of co-ops and when students get back we all share our stories. From these stories I've learned that companies probably should make sure their co-op program is strong if they are even going to attempt one. Most of what I hear is "I did nothing. It was boring." If I ran a business and were paying for co-ops I would make sure I would never give them the chance to utter those words. Otherwise I would be losing money (granted co-op money is not much in comparison to your employees). I know this is a tangent topic, but I figured I would share.
Do you think labor laws need to be adjusted to reflect more current trends in the workforce?
I think the law covers this topic well enough. I haven't heard of any big problems coming out of this topic, though I certainly haven't been looking. Maybe there are more problems underneath the surface?
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On the one hand, it can really be a great opportunity for the intern, as Nate said.
But on the other hand, abuse is pretty common in the form of slapping the "internship" label onto what is really an entry-level job, where competence is already assumed/required.
Also, I think "intern" and "internship" are no longer well defined (if they ever were), and that makes the ethics of unpaid internships difficult to talk about. For some definitions of internship, I think it's totally fine. For other definitions, it's absolutely not. And for yet other definitions, it becomes a grey area where I feel distinctly uncomfortable about the whole thing, but probably wouldn't raise too much of a fuss.
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There are too many companies out there which use and abuse internships, and should face legal actions for their crimes, I have experienced/witnessed a few of them personally. One place offered to pay me, I met at their house (should have been a first red flag) and a couple claimed to have been running a successful marketing business and were seeking to hire a web designer. I decided to begin working for them, it was all work at home and I contacted them by phone/chat (2nd red flag), long story short about 3 weeks went by and I inquired about receiving my paycheck and they immediately cut off communication, I know I was foolish for not obtaining a signed contract or work agreement but that is one example of how a "Company" can screw you over.
Some further examples from some friends of mine also in the graphic/creative field is that they were offered an unpaid internship in a group of about 10 or so other people with the promise of obtaining valuable experience and a full time job to the most qualified of the interns (all verbal nothing in writing), the internship initially was intended to last for 3 months, a friend of mine ended up foolishly agreeing to stay for 6 months, during this time all the interns were doing actual work that the company used for profit. Of course they slowly let down one potential candidate at a time before ultimately letting all of them go without paying anyone a cent. They preyed on people fresh out of college with no real world experience to see the traps laid out for them. Eventually this company did this unpaid tactic to all it's actual paid employees and kept promising to pay them as soon as they could, they ended up not paying any of their 200 employees for 4 months and owed $2 million in unpaid wages and were finally turned in and shut down. I could go on and on with these examples, these people are sick and need to be thrown in jail or fined.
What happens if there is an undocumented internship for a dangerous job where someone ends up getting severely injured or killed such as a steel mill or construction company. The "Company" would just claim that they had nothing to do with anything and have no clue who the victim was and would probably get away with the crime, there's something to think about.
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