Regulators are starting to pay attention to the widespread practice of using unpaid interns as free labor. It's about time. In addition to being illeg
April 4, 2010

Regulators are starting to pay attention to the widespread practice of using unpaid interns as free labor. It's about time. In addition to being illegal, the practice also means that poorer students are shut out of career-track opportunities, leading to a concentration of the privileged and well-off in influential occupations like the media and public policy:

Convinced that many unpaid internships violate minimum wage laws, officials in Oregon, California and other states have begun investigations and fined employers. Last year, M. Patricia Smith, then New York’s labor commissioner, ordered investigations into several firms’ internships. Now, as the federal Labor Department’s top law enforcement official, she and the wage and hour division are stepping up enforcement nationwide.

Many regulators say that violations are widespread, but that it is unusually hard to mount a major enforcement effort because interns are often afraid to file complaints. Many fear they will become known as troublemakers in their chosen field, endangering their chances with a potential future employer.

The Labor Department says it is cracking down on firms that fail to pay interns properly and expanding efforts to educate companies, colleges and students on the law regarding internships.

“If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law,” said Nancy J. Leppink, the acting director of the department’s wage and hour division.

Ms. Leppink said many employers failed to pay even though their internships did not comply with the six federal legal criteria that must be satisfied for internships to be unpaid. Among those criteria are that the internship should be similar to the training given in a vocational school or academic institution, that the intern does not displace regular paid workers and that the employer “derives no immediate advantage” from the intern’s activities — in other words, it’s largely a benevolent contribution to the intern.

Robert Farley at Lawyers Guns & Money sums it up:

Good on ‘em. Let’s be clear; the unpaid internship effectively excludes a wide socioeconomic swath from gaining useful experience and making effective connections in business, government, and NGOs. For example, it was utterly impossible for me to even consider an unpaid internship as an undergraduate; paying the bills was difficult even with loans and full time work. Lots of young people lack significant parental support, and require minimum payment to have any hope of making ends meet. Moreover, even for those with support the “payment” for unpaid internships (connections, experience, and recommendations) often has no lasting effect on the intern’s job prospects. If you’ve ever wondered why DC NGOs and journalistic organizations are dominated by Ivy Leaguers, it ain’t just because they’re smart.

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