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Are Unpaid Internships Legal?

How Can an Employer Justify not Paying its Interns?


Don't let yourself be one of those students who find themselves in the position of not having completed at least one internship prior to graduating from college. There are many students who have received a remarkable education but one thing that may hold them back in finding a job in this competitive job market, is that they lack real work experience to add on their resume. Some students graduate without completing one internship while others are lucky enough to learn about internship opportunities early in their college career and are able to complete one or more prior to entering the job search process upon graduation.

Unpaid internships can be worthwhile if both the company and the intern approach the internship in the right way. The intern can benefit from networking opportunities, a chance to list real world experience on a résumé, and by being able to gain invaluable on-the-job training that will set them apart from other candidates. The company can benefit by having a new person share fresh perspectives on the business, having additional hands-on support, and giving back to the community by investing in new talent.

What’s most important to employers when hiring interns?

You may be thinking that with a 3.74 GPA any employer would be happy to hire you. The truth is that even though your GPA is important, employers seek much more when hiring in today's job market. The #1 thing that employers look for is previous relevant experience. Other things that are important to employers are the transferable skills that students gain through their academic experiences as well as any internships, jobs, volunteer, research, or community service projects they have participated in. These transferable skills include: communication, interpersonal, leadership, organization, computer skills, administrative, etc..

With employers today seeking job candidates with prior real-world experience, internships are no longer optional. Many colleges and/or specific majors require that students complete an internship to fulfill their course requirement. With internships playing such a major focus in the overall education process, it is important for students to be creative when seeking internships to ensure that the experience will provide them with the knowledge and skills they need in land a job in today's competitive job market.

Paid vs. Unpaid Internships

Of course paid internships are always preferable to those that are unpaid. The problem is that it is estimated that only one half of all internships are paid. So, the question a student might ask themself is: should I do an unpaid internship for the summer or seek employment that will provide me with a weekly pay check?

Students may find themselves very frustrated when all they can find is unpaid internships available in their field. Anyone seeking an internship in the non-profit sector will most likely find these internships to be unpaid. In addition, there are many other companies that do not pay their interns. In accordance with the Department of Labor’s Internship Guidelines, for-profit organizations must meet very specific criteria in order to not pay their interns. The year 2012 may set a precedent on how companies benefit from interns and may cause companies to take another look at how they provide compensation.

Will unpaid internships eventually become obsolete?

I think we are going to see more attention focused on the moral and ethical responsibilities of employers in regards to internships. In 2012 we have witnessed class action lawsuits from interns who previously worked for companies that did not provide compensation for their interns; such as: Harpers' Bazaar, Fox Searchlight, and Charlie Rose. In a conversation I had with Fox Searchlight last year they informed me that they are paying all of their interns moving forward with the intent of compensating students for the work that they perform. In December Charlie Rose recently settled a lawsuit paying out $250,000 to close the lawsuit filed by one of the programs previous interns.

What types of compensation are available for interns?

There are many ways that organizations can compensate interns. Some may pay an hourly fee while others might offer a stipend for the time the student works for the organization. There are companies that provide housing and transportation costs while others that offer benefits such as free tickets to major events and/or a chance for the intern to meet important people in the field by inviting them to conferences or other professional development activities offered primarily to professionals currently working in the field.

Organizations that do not offer compensation for their internships may be subject to the more stringent guidelines as they have been laid forth by The Department of Labor. In addition to federal guidelines pertaining to internships, some states have their own regulations as well. As one example, in California the state requires that interns receive credit for their internship.

Can unpaid internships provide a win-win situation for both the intern and the company?

There are times when an unpaid internship can be considered a win-win situation for both the employer and the intern. Companies can benefit from having an intern since they may possess the latest knowledge and skills being taught in the classroom. This new perspective a young intern can bring to the table can enhance some of the more established talent currently working for the company. Companies who take the time to mentor their interns can also feel good about providing students with real-world experience by introducing them to some of the best professionals in the field.

For the student, the real world experience they gain by doing an internship helps them bridge the gap between academics and what they need to do in the work place in order to be successful. Internships are also a great addition to any resume. One of the main benefits of doing either a paid or unpaid internship is the fact that students will be able to make connections and network with key figures currently working in the field. There's nowhere else that the student can gain these types of benefits other than doing an internship, volunteer, community or research experience.

Working as an unpaid intern can have its own benefits as well. Interns may have the chance to exert more control when doing an unpaid internship by letting the employer know what type of experience they are hoping to get. When doing a paid internship companies generally think of the intern more as a regular employee rather than someone who is there to learn the many facets of the job. As an unpaid intern it's much easier to turn down a job if the company isn't willing to provide the type of training that will help you get a job after graduation.

So, and rightfully so, you may still be asking yourself, "is my unpaid internship illegal"? Here is a 5-Minute Flowchart that may help you to answer that question.

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