SMITH: The illegality of unpaid internships

Under current regulations, many unpaid interns are being exploited by major corporations

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Students should by no means refrain from asking about and discussing courses with their peers, but these conversations must serve as a complement to the online resources that are available.

Courtesy Startup Stock Photos

Since summer break is nearly upon us, many students at the University are preparing to embark on internships. What many may not be aware of, however, is the prevalence of unpaid internship is a relatively new phenomenon. From the ‘80s to the mid-aughts, student participation in internships rose from 10 percent to over 80 percent. This large rise signals a shift from pre-1980s internship tradition, in which only pre-professional careers offered internships, which would be better described as apprenticeships. 

In the fast-paced internship industry of today, unpaid internships often use promises of college credit to counterbalance the lack of compensation for labor. Demand for industry experience has risen to a point where students will aggressively compete for unpaid positions. This stems from both the myth that internships lead to job offers and the impact of the Great Recession on undergraduate students. This still remains true for paid internships, of which 63 percent of internships earned a job offer. However, for the unpaid internships, only 37 percent netted a job offer — in comparison, 35 percent of graduates with no internship experience also gained job offers.

While summer internships offer some opportunities for students to test a career path, gain experience in a field or possibly provide a pathway to a job offer, many internships in their design exploit student labor. In particular, unpaid internships threaten students’ mobility within career paths, with employers leveraging their offers of “experience” for no compensation. Not only does this constitute a loss of opportunity, but in many cases employers’ actions are illegal.

Under current regulations, only non-profits can host unpaid interns within their organizations, because it can be categorized as volunteering. However, many for-profit institutions avoid legal consequences because the enforcement of intern protection regulation tends to be minimal. In a notable exception, interns on the sets of “500 Days of Summer” and “Black Swan” won the right to file a class action lawsuits against Fox Searchlight. According to the Washington Post, the judge presiding over the case determined that Fox Searchlight “violated minimum wage and overtime laws.” 

Given the ruling against Fox Searchlight, companies now have to evaluate whether interns clear the threshold for worker status or can be understood to be volunteers. This standard proved to be crucial in a failed class action lawsuit by a former Harper's Bazaar intern, Xuedan Wang v. The Hearst Corporation. The judge presiding over this case concluded that the “totality of circumstances” had to be considered — the same “circumstances” directly benefit employers’ abilities to skirt regulations. 

In other words, this judge determined that interns at Harper’s could not file for a class action lawsuit, because their assigned tasks varied from intern to intern — this variation made it impossible, for this particular judge, to assume each intern had been wronged equally. In contrast, the judge presiding over the Fox Searchlight case accepted that the various menial tasks done by interns constituted employee status, ranging from fetching packages to scanning documents. This underlying issue of internship rights rests with arbitrary judge rulings — in the current legal apparatus, judges are able to make rulings based on their own interpretation of loose regulations.  

While a fact sheet detailing a seven part test has been released by the U.S. Department of Labor detailing the extent to which an intern is a student or employee under the Fair Labor Standards Act, the FLSA doesn’t specifically grant protections to interns — a loophole that allow employers to exploit the gray area. Each of the seven statements of the test start with “the extent to which — ,” indicating the looseness of the regulatory language. Given that the language of the primary beneficiary test is filled with thorny language, employers can weaponize a different interpretation of the clauses in order to thwart giving interns a wage.

The current state of intern rights only seems to be getting more dire. The rollout under President Trump’s Department of Labor of the seven-part “primary beneficiary” test now replaces the standards present in FLSA, which eases regulations designed to protect interns. Additionally, Congress has also exempted itself from FLSA regulations for its own interns working on Capitol Hill.

With 55 percent of undergraduates participating in an internship during their collegiate years in 2012 according to the National Association of Colleges and Employers, the time to protect students is increasingly necessary, with the number only likely to rise. Students deserve both access to career experience and the dignity of a wage. At its root, this issue is a matter of accessibility — students need to have concrete and realistic pathways to careers without performing what is essentially indentured servitude. Student continue to be drawn to internships because of their promise of opportunity. However, in the current climate, these internships present a false hope — delivering instead a cesspool of legal loopholes and privilege barriers. 

Katherine Smith is the Senior Associate Opinion Editor for The Cavalier Daily. She can be reached at k.smith@cavalierdaily.com.

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