Unpaid Internships - Common but Illegal

A common, but frequently unreported labor violation is the use of unpaid interns in violation of minimum wage and possibly overtime laws.  The scenario is fairly typical: a company offers an opportunity to ‘break into the business’ in exchange for the intern working for free.  You see many examples of this in the entertainment industry.  In fact, despite jobs sites such as Craigslist prohibiting the posting of unpaid “internships,” you can almost always find one posted.  Some companies try to get around the law by requiring that the internship be part of a college program.  However, there is no exception to the law allowed just because the “intern” may receive college credit.  While it might be possible for a college credit course to require some type of training for a company, the vast majority of these internships are in violation of Federal as well as California labor laws.

In order to qualify as an unpaid internship, the requirement is simple:  no work can be performed that is of any benefit at all to the company.  That is, you can not deliver mail, sort files, file papers, organize a person’s calendar, conduct market research, write reports, watch television shows and report on them, read scripts, schedule interviews, or any other job that assists the employer in any way in running their business.   

Examples of internships that have been legal are where the job is a “dummy” job.  For example, there was a case of an internship for working on a train.  The company had the interns driving trains from one end of their yard to the other under close supervision.  The moving of the trains was completely unnecessary and was just being done to train the potential employees. As such, no “work” was being performed, so the internship was legal.  On the other hand, if the workers were moving the trains as part of the regular re-positioning of the trains, but were still performing it under close supervision, they would be required to be paid for the work.

Thus, if in the entertainment industry, you read scripts that have already been read and rejected by the company and the company will not use your input in any way but is simply instructing you on how to read scripts, then they would not need to pay you for your time.  However, if you read the scripts and perform any work that is used by anyone in the company to make any type of decision about that script, then you must be paid for your time.

Another common type of unpaid internship is in martial arts schools that require students to teach classes in order to receive additional belts.  This practice is illegal unless the student is paid for the time.  Because the act of teaching a class is work that benefits the employer, it must be paid for.   

The U.S. Department of Labor has outlined a list of criteria that ALL must be met in order for an internship to be unpaid.

1. 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;
2. The training is for the benefit of the trainee;
3. The trainees do not displace regular employees, but work under close observation;
4. 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;
5. The trainees are not necessarily entitled to a job at the completion of the training period; and
6. The employer and the trainee understand that the trainees are not entitled to wages for the time spent in training.

From the above list, #4 is really the key one – all the others will follow from whether the employer derives any immediate benefit from the activities.

The main reason that you do not see more lawsuits regarding unpaid internships is that the interns are very unlikely to sue.  In most cases, they fear being blacklisted, as they will undoubtedly need to use the internship as a reference to get any future work.

This is where California’s Private Attorney General Act comes in.  Because this law allows anyone at the company to sue for labor violations, even if they themselves are not affected by the violation, it is now possible for these companies to be brought into compliance with the law.  If you work for a company that uses unpaid interns and would like to put an end to this illegal practice, you should consider bringing a Private Attorney General cause of action.

Of course, if the internship is work, not only minimum wage must be paid, but also California overtime (8 in a day / 40 in a week) as well as meal and rest breaks.

Comments

[Diane]

This is just the information I was looking for regarding unpaid college internships. An associate (owner of a child care facility) wants to have volunteer internships at her establishment and wanted to know how to create a college internship. I needed information on the California Labor Laws and this piece was very helpful, especially explaining how
for-profit companies could comply with California Labor Laws. Well Done!!!!!!!!!

[Andrew Peter]

Entertainment Internships - InternZoo.com offers an online database of Entertainment Internships Just perform a google search for Entertainment internships New York, or Entertainment internships California to find us for

[Donna Schuele]

Thank you for this posting. It was precisely the information I was seeking. I am on the faculty at a university that places students in unpaid internships at for-profit enterprises. The university counsel has been made aware of the advice given above but is not concerned that these placements put the university at any discernible risk. Does the university have risk exposure or is it only the for-profit enterprise? Does a professor supervising the student on the academic end of the internship, who has knowledge that the student is engaging in activities that benefit the company, have risk exposure? Do the administrators of the program, that have designated the for-profit enterprises as approved placement sites, have any risk exposure? Would the fact that the professor is a member of the Calfornia bar affect the risk exposure?

[Jeff White]

Check out "Do You Want An Internship? It'll Cost You" article in 1/28/09 WSJ? Not only unpaid but parents are paying companies to get unpaid internships for their kids. Being mainstream does not make it legal but have they found a loophole to make it work?

[Martial Arts Schools]

Yeah!I took note of your article when I did the research for this article. I wanted to take a more in-depth look at what the law says and how it is interpreted. I think my results are correct that unpaid internships may or may not be illegal depending on the specific situation.

[renee beth]

I have spoken directly with a labor law attorney and depending on the position and specific situation, not all unpaid internships are illegal. It is not illegal in the legal field that internships be unpaid. This type of law is to protect those abusing the word "intership", and looking for free labor and not actually teaching someone something. The guidelines pointed out in this outline are those that would be tought in an law office internship. Law offices have many interships, from file clerks to attorneys. But this law office is teaching some of what that would be tought in a legal assistant/paralegal program, plus more. I hope that all that read this and understand that how you read this law is unspecific in nature as the type of internship.

[anonomous]

Why do you make this claim and do not point to any part of federal or califronia law to show this in writing.

give us the section of the labor code which prohibits unpaid internships

anybody can write anything on a blog and that doesn't make it true.

Sight one case where a company was sued and the plantiff won back wages.

give us legal sections of federal or california law to look at, give us precedence to look at a case where this ruling was enforced, otherwise you sound like a guy who is upset that he can't find enough work and is looking for a target to burn.

before you light the torches of the towns folk show us proof.

Internships have been a legit way for students to learn real life skills while still in college for many years.

by your logic any volenteer of any kind would be illegal, so quick get the villagers to burn down every police and fire station in the land, let's sue every old folks home in the country.

all of these use volenteers every single day. are you telling me they are violating the law and we should put a stop to it.

well represented groups such ROTC, boy scouts, girl scouts and others take part in this type of volenteer work everyday, are you telling me they are liable because they arrange this?

if you want to make a wild claim, you need to be able to back it up, and you can't. or at least you haven't so far

there have been many people in history who have gone to work for local, state, and federal goverments as interns and others who forego salary in lieu of one dollar a year to save the tax payer money, are you telling me they too are breaking the law.

yes a labor lawyer might tell you, you can sue. they want your money, but show me a case where someone has won this type of case, and it was held up on appeal!

any two people can enter into a contract, the terms of which are upto the two people.

of course you can't break the law, but show us this law you refer to which you don't feel the need to point out the section you are intepreting.

and better yet don't fill up Craigslist crew gigs with your rants, as that is agianst the CL Rules

[Mike]

1. there is a link to federal internship requirements in the article
2. the ROTC, Boyscouts etc are nonprofit therefore can not gain "benefit" i.e. profit from the volunteer work and that is the lynch pin of the criteria.
3. yes taking a salary of $1 dollar a year is a violation of california law IF they are profiting from your labor

but your right some more examples would make for a stronger argument.

[anonomous]

Ok let’s get this going

Try knowing what you are talking about first mike

Which of the two links listed in the blog is a link to the code of the law which expressly prohibits unpaid internships?

The answer neither.

I am guessing you just read the blog and didn’t bother to click on either link to see what they were, because if you did you wouldn’t have challenged what I said

The first link

Called U.S. Department of Labor has outlined a list of criteria doesn’t show any part of the Cal or Fed law making unpaid internships illegal

It goes to nothing , if you had clicked it you would know it’s a dead link, probably removed, by the government who can’t stand the onslaught of problems unleashed by this guy(Digg This) with no legal background making claims that unpaid internships are illegal!

https://www.youth2work.gov/esa/whd/opinion/FLSANA/2004/2004_05_17_05FLSA_NA_internship.pdf is the actual url and there is nothing there and certainly not the law where it is illegal to hire an unpaid intern!

And the 2nd link California’s Private Attorney General Act

Deals with how you can file a claim against a company and what violations you can sue for(file about).

It doesn’t have the code number for unpaid internships and doesn’t state anywhere that you can sue a company for unpaid internships or state that unpaid internships are illegal! It provides no penalties to companies using unpaid internships and doesn’t make clear that they are illegal.

And maybe if Mike or Digg This bothered to read the links he was pointing to, both would see there is no code listed in relation to unpaid internships at all in the California Labor Code. And if you really think there is show me and the other readers the clause it is in. I challenged you to that before and you couldn’t do it! So please stop making statement you can’t prove.

The page here http://www.privateattorneygeneral.com/labor_code.html list all the parts of the code which violations can result in legal actions, and none have anything to do with unpaid internships.

The closest you might get is

California labor code 1194, 1197, 1197.1 which states you have to paid min wage to employees.

So since this can be the only thing you can stretch the truth on to make your false point, let’s take a closer look at this.

[anonomous]

The entire law can be found at

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=lab&group=01001-02000&file=1171-1205

1194 is

(a) Notwithstanding any agreement to work for a lesser wage,
any employee receiving less than the legal minimum wage or the legal
overtime compensation applicable to the employee is entitled to
recover in a civil action the unpaid balance of the full amount of
this minimum wage or overtime compensation, including interest
thereon, reasonable attorney's fees, and costs of suit.
(b) The amendments made to this section by Chapter 825 of the
Statutes of 1991 shall apply only to civil actions commenced on or
after January 1, 1992.

1197 is

1197. The minimum wage for employees fixed by the commission is the
minimum wage to be paid to employees, and the payment of a less wage
than the minimum so fixed is unlawful.

1197.1 is

(a) Any employer or other person acting either individually
or as an officer, agent, or employee of another person, who pays or
causes to be paid to any employee a wage less than the minimum fixed
by an order of the commission shall be subject to a civil penalty as
follows:
(1) For any initial violation that is intentionally committed, one
hundred dollars ($100) for each underpaid employee for each pay
period for which the employee is underpaid.
(2) For each subsequent violation for the same specific offense,
two hundred fifty dollars ($250) for each underpaid employee for each
pay period for which the employee is underpaid regardless of whether
the initial violation is intentionally committed.
(b) If, upon inspection or investigation, the Labor Commissioner
determines that a person has paid or caused to be paid a wage less
than the minimum, the Labor Commissioner may issue a citation to the
person in violation. The citation may be served personally or by
registered mail in accordance with subdivision (c) of Section 11505
of the Government Code. Each citation shall be in writing and shall
describe the nature of the violation, including reference to the
statutory provision alleged to have been violated. The Labor
Commissioner promptly shall take all appropriate action, in
accordance with this section, to enforce the citation and to recover
the civil penalty assessed in connection with the citation.
(c) If a person desires to contest a citation or the proposed
assessment of a civil penalty therefor, the person shall, within 15
business days after service of the citation, notify the office of the
Labor Commissioner that appears on the citation of his or her
request for an informal hearing. The Labor Commissioner or his or
her deputy or agent shall, within 30 days, hold a hearing at the
conclusion of which the citation or proposed assessment of a civil
penalty shall be affirmed, modified, or dismissed.
The decision of the Labor Commissioner shall consist of a notice
of findings, findings, and an order, all of which shall be served on
all parties to the hearing within 15 days after the hearing by
regular first-class mail at the last known address of the party on
file with the Labor Commissioner. Service shall be completed
pursuant to Section 1013 of the Code of Civil Procedure. Any amount
found due by the Labor Commissioner as a result of a hearing shall
become due and payable 45 days after notice of the findings and
written findings and order have been mailed to the party assessed. A
writ of mandate may be taken from this finding to the appropriate
superior court. The party shall pay any judgment and costs
ultimately rendered by the court against the party for the
assessment. The writ shall be taken within 45 days of service of the
notice of findings, findings, and order thereon.
(d) A person to whom a citation has been issued shall, in lieu of
contesting a citation pursuant to this section, transmit to the
office of the Labor Commissioner designated on the citation the
amount specified for the violation within 15 business days after
issuance of the citation.
(e) When no petition objecting to a citation or the proposed
assessment of a civil penalty is filed, a certified copy of the
citation or proposed civil penalty may be filed by the Labor
Commissioner in the office of the clerk of the superior court in any
county in which the person assessed has or had a place of business.
The clerk, immediately upon the filing, shall enter judgment for the
state against the person assessed in the amount shown on the citation
or proposed assessment of a civil penalty.
(f) When findings and the order thereon are made affirming or
modifying a citation or proposed assessment of a civil penalty after
hearing, a certified copy of these findings and the order entered
thereon may be entered by the Labor Commissioner in the office of the
clerk of the superior court in any county in which the person
assessed has property or in which the person assessed has or had a
place of business. The clerk, immediately upon the filing, shall
enter judgment for the state against the person assessed in the
amount shown on the certified order.
(g) A judgment entered pursuant to this section shall bear the
same rate of interest and shall have the same effect as other
judgments and be given the same preference allowed by the law on
other judgments rendered for claims for taxes. The clerk shall make
no charge for the service provided by this section to be performed by
him or her.
(h) The civil penalties provided for in this section are in
addition to any other penalty provided by law.
(i) This section shall not apply to any order of the commission
relating to household occupations.

[anonomous]

Ok now let’s break this down for the average person who may not understand what they are reading here.

First nowhere in this does it state anything relating to nor does it mention the words unpaid internship.

This law speaks only to a job where an employee is being paid wages below min wage.

The first line in 1194

(a) Notwithstanding any agreement to work for a lesser wage,
any employee receiving less than the legal minimum wage or the legal
overtime compensation applicable to the employee is entitled to
recover in a civil action the unpaid balance of the full amount of
this minimum wage or overtime compensation, including interest
thereon, reasonable attorney's fees, and costs of suit.

is worth looking at: notwithstanding or in layman’s terms “despite”

So if you make an agreement to get paid less than min wage with an employer this law entitles you to get back wages

But where does it state if you agree to perform duties as a volunteer or intern you have any rights to min wage or to get paid anything at all? It doesn’t!

The key word in this clause is employee,

Let’s take a closer look at the term employee

first source
the legal definition by as used by lawyers and in legal cases

http://www.lectlaw.com/def/e009.htm
EMPLOYEE - A person who is hired by another person or business for a wage or fixed payment in exchange for personal services and who does not provide the services as part of an independent business; Any individual employed by an employer.
Source Two
a regular dictionary
http://www.yourdictionary.com/employee
employee definition
em·ployee or employe em·ploy′e (em plo̵i′ē, im-; em plo̵i′ē′, im-; em′plo̵i ē′)
noun
a person hired by another, or by a business firm, etc., to work for wages or salary

Now let’s look at the word internship

http://en.wikipedia.org/wiki/Intern
An intern or stagiaire is one who works in a temporary position with an emphasis on on-the-job training rather than merely employment, making it similar to an apprenticeship. Interns are usually college or university students, but they can also be high school students or post graduate adults seeking skills for a new career. Student internships provide opportunities for students to gain experience in their field, determine if they have an interest in a particular career, create a network of contacts, or gain school credit. Internships provide the employers with cheap or free labor for (typically) low-level tasks (stereotypically including fetching coffee for the office), and also the prospect of interns' returning to the company after completing their education and requiring little or no training.
An internship may be either paid, unpaid or partially paid (in the form of a stipend). Paid internships are most common in the medical, architecture science, engineering, law, business (especially accounting and finance), technology and advertising fields. Internships in non-profit organization such as charities and think tanks are often unpaid, volunteer positions. Internships may be part-time or full-time; typically they are part-time during the university year and full-time in the summer, and they typically last 6-12 weeks, but can be shorter or longer. The act of job shadowing may also constitute as interning.
Internship positions are available from businesses, government departments, non-profit groups and organizations. Due to strict labor laws, European internships are mostly unpaid, although they are still popular among non-Europeans in order to gain international exposure on one's resume and for foreign language improvement.
Notice not one mention of the word employee, as an internship is not an employee, he or she is an intern or a volunteer which are both words commonly defined as unpaid workers!
In fact it states “rather than merely employement” suggesting to all of us who can understand what we read that an intership is not only not employment but is a substitute for, or the opposite of employment.
I have made the challenge to Digg This who posted at a website anyone can post anything at, and anyone else who wants to make this false claim that unpaid interships are illegal to point to the Fed or Cal code which clearly states this.
So far nobody can!
There are other issues Mike raised about my original post which I will get to later when I have more time, as Mike is wrong about everything he wrote in response to my posting.
But first let’s see Digg This or Mike point to the law where they get this false claim they are making!
The fact is they can’t, as if they could they would have already!
If I am wrong I will be the first to admit it, but a 50 year old case study about probationary periods in hiring employees, and a policy handed down as an opinion by a government agency is not a substitute for the law.
So show me the code!

[annonymous]

http://www.naceweb.org/info_public/legal.htm

[Noone]

Also does that include white endutured slavery ie livining in basically a closet in exchange for 80 hrs a week of work no food no compensation but an empty room?

[John]

Ed Hardy is the KING of unpaid internship, they flood the Craigslist wanted postings... there are so many uninformed designers who are taken advantage of. WAKE UP!!!!!!!

[DomesticGoddess]

Is this case scenario legal or illegal?

Our daughter is currently in graduate school in Los Angeles. This summer (2009) she is doing an internship for a non-profit organization in Texas. Her university's policy states that it is mandatory for her to have an internship. Talk about exploitation! She's BORROWING and PAYING thousands of dollars (regular tuition rates) to work there for FREE, as part of her master's program in dietetics/nutrition. In turn, the university is sending some of that money to the non-profit organization. It's like she's donating money to be mis-treated! go figure.

Last Wednesday she was singled out of 10-12 other interns and told to go into the organization's warehouse, which was like 110 degrees F, to count and label Ice Chests for 9 hours. There were 528 ice chests.

She asked her supervisor how they wanted the inventory to be done, and whether she should use a spreadsheet or typed report form; her supervisor's response was, "You should already know how to do this. I'm not going to tell you anything." She obediently marched into the warehouse, wearing her required office attire with high heels..... she nearly passed out.

Then, on Friday she was told she hadn't counted the smaller ice chests or labeled them separately from the larger ones (even though they had never instructed her to do so). Now she's back there again today, and we're afraid she may become sick, have a heat-stroke, or possibly pass out from the high temperature in the building.

I told her to dial 9-1-1 and ask for an ambulance if she becomes sick in the non-ventilated warehouse today. I think the organization should foot the bill for making her sick. What kind of nutrition work-place skills is she learning, anyway? Her professors at the university have never specifically stated what her "job description" is supposed to be this summer....we're just curious how the warehouse is supposed to teach her "nutritional research methods!"

We begged her to call her university advisor, but she said she didn't want to get a bad grade for the internship. And she won't report the workplace supervisor to an authority figure at the organization, because she's so afraid it will affect her Internship, and the grades they will give her.

I am doing some research for an expose' on the exploitation of university student interns.... If you've ever been exploited through an internship position, whether through unreasonable demands, unhealthy working conditions, threats of a physical or sexual nature, or you've been over-worked for more than 40 hours, and generally feel they've taken advantage of your goodwill, please let me know!
I am writing this article with no pre-conceived notions, but am aware that there must be more than just my daughter who is or has suffered while fulfilling an internship position.

We can hardly wait until the internship is over, and her grades have been posted! Her father intends to press charges against this non-profit organization.
And If you have any suggestions for us in the meantime, please feel free to comment