Unpaid Internships Ruled Illegal – Is That a Good Thing for Students?


FoxSearchlightLogoAn article by Steven Greenhouse in the New York Times reports that Fox Searchlight Pictures had violated federal and New York minimum wage laws by not paying production interns, a case that could upend the long-held practice of the film industry and other businesses that rely heavily on unpaid internships.

The judge noted that these internships did not foster an educational environment and that the studio received the benefits of the work. The case could have broad implications. Young people have flocked to internships, especially against the backdrop of a weak job market.

Employment experts estimate that undergraduates work in more than one million internships a year, an estimated half of which are unpaid, according to Intern Bridge, a research firm.

On the Intern Bridge website, the firm makes a statement and provides additional information for companies  and students considering unpaid internships:

At Intern Bridge, we strongly believe that all internships should offer hourly monetary compensation. This best practices recommendation is based on countless hours of proprietary research utilizing survey responses from over 100,000 students, discussing the issues with our nationwide network of career center and human resources practitioners, and taking into account critical business and economic principles.

While we consistently advocate for paid opportunities for students, unpaid internships have built a strong presence in the internship space. Recently, the Department of Labor began an awareness campaign to share information regarding potential legal issues with hosting unpaid interns. This Unpaid Internship Resource Center has been designed to share as much up-to-date information as possible.

“Employers have already started to take a hard look at their internship programs,” said Rachel Bien, a lawyer for the plaintiffs. “I think this decision will go far to discourage private companies from having unpaid internship programs.”

busboybwUnpaid Internships: the corporate equivalent process for getting into a fraternity in college

Freshman in college choosing to go the social frat route have a couple of hurdles to overcome before being accepted. They must endure embarrassing acts (hazing) and subordinate themselves to the upperclassmen – all while trying to pursue academic standing and other extracurricular activities. And, they have to pay for the privilege to be hazed.

Unpaid company internships, commonly, are general sanitation, lunch order takers and delivery drivers, doing work that in no way enhances their skills and knowledge and prepares them for a professional job upon graduation from college. I consider it a form of hazing when it is a standard way of doing business in a specific industry, such as the film and television entertainment production industry.

This illegal process is so prevalent that students believe they have to do it in order to “break into the business”.

The power of LinkedIn to see the value of unpaid internships vs paid internships

With LinkedIn now the business world version of Facebook, you can find people in your career field that graduated two, four, six or more years ago, took an “unpaid” internship (their profile won’t say it was unpaid but based on what you know about company reputations around internships you can make some assumptions) and see where they ended up. In other words, did the unpaid internship lead to something bigger and better? For the film industry, most did not. Do the same with people that completed a paid internship. Not sure, “inmail” them asking for their insight about the value of their internship.

Are you considering taking an unpaid internship?

Don’t. Unless the following have been provided to you:

  • A specific job description or written objectives that assigns work that increases your skills and knowledge (taking lunch orders and emptying trash cans does not in any way add skill and knowledge of any benefit).
  • The names of the people you will be assigned to work for. Are they managers and/or senior experienced professionals with expertise you want to learn from? Have you met the people you will work for? Did they discuss their commitment to assigning you meaningful work and mentoring you?
  • A path for how the internship will lead to full time opportunities after graduation or after the internship is up. The benefit for the company should be one focus: to evaluate the internship for possible hiring upon graduation.
  • A specific period of time that the unpaid portion will last. Ideally, you are then converted to paid internship or full time.

The film and television entertainment industry including the dramatic arts (theatre) may be the worst industry that abuses the internship model. All companies in all industries that abuse the internship’s true purpose are broadcasting a message that they are a backward thinking, short term-focused and unethical company. Do you really want to work for that kind of company?

If you want to work for one of these companies, just apply for the open janitor position. At least then you’ll get paid.

Carl Nielson is a professional career coach and author of the Career Coaching for Students program. For information about career direction and job search coaching, check out Success Discoveries’ Career and Success Skills Mastery for College Students and Recent Grads. Assessment and coaching packages start at $349 – special Summer 2013 offer.

3 responses to “Unpaid Internships Ruled Illegal – Is That a Good Thing for Students?

  1. Call it what it is – volunteering.

  2. No company will hire “you” as an intern unless they feel they can get a contribution from you that’s of some value. To the extent that you provide value to the organization, you deserve to be compensated just as any other employee. If you’re an employer, you’re likely to run afoul of labor laws if you fail to pay your interns so why do it? The marginal utility of getting a reputation as a “cheap” company is zero. Let’s call unpaid internships what they are: “exploitation”.

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