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

[Me]

DomesticGoddes, OMG, that's terrible! Ok, I'm going to sound probably pretty stupid, but from watching Judge Judy (HAHA!) the first thing the judge is going to ask is, "If her life was in that much danger, why did you not intervene in that instant? If you were so afraid for her health and welfare, why did you not put a stop to it?" I hope this feedback helps, as dopey as it is.

ps. Can that guy dissecting the word "employee" be any more obnoxious? Mike was trying to be a good guy and meet him halfway with deference. The way anonymous responded makes me think anonymous can't read or see the grass for what it is. That is a loss of credibility.

[Phil]

Anonymous is probably a "slave" laborer who takes advantage of people to keep profits stable or even raise them at the expense of good, young, hardworking students. So F@$ck you Anonymous! (you didn't even spell anonymous right retard)

Anyway a collegue of mine directed me to this post which I thought was a good straight to the point article. The fact is that many companies are taking advantage of students even if the internship is paid! The entire system is corrupt and outdated from first grade to corperate America. Future generations are working for a future that doesn't exist for them. And the people that exploit them just for the sake of profits are only making it worst for themselves as well, since the last thing anyone should want to be is rich because in the future it's the rich who are going to be paying for world problems brought on by a wastefull and unsustainable lifestyle.

Whoever DomesticGoddes is that posted a response about her daughters internship in Texas, Pleas Contact me: philrubio@ymail.com. I have a production company in the planning stages of a documentary on the cost of higher education and everything that sourrounds it (including taking advantage of students through illegal internships) and the domino effect it will have on the world and future generations.

As for everyone else who reads this article here (which I agree with wheather or not there is a stupid section or Gov. Code for it) please follow your gut, if feels, looks, or sounds wrong, it most likeley IS WRONG. Plan ahead about your son or daughters education (far ahead!) and their internships or however they break into their industry of choice. No one should ever work for free without compensation.

Thanks for writing a thought provoking article.

[anonumous]

Is it legal to have a program with youth in which you train them in sales to help you, and give them a percentage also providing them with sales coaching and goal setting?

[Alicia]

I own a video production company and commonly use interns. I was forwarded this blog post. I interned every second I could while going through college for my degree and can honestly say that everything applicable to my career I learned was from hands on experience. Often times by the end of the internship I was earning a pay check or asked to become a PA (produciton assistant). Most of the interns I have are so wet behind the ears I would never hire them for the job. I can say that many other production company employers would say the same thing.

I require that my interns be earning school credit (for insurance reasons is what I thought, if the student were to get injured they would be covered by the university). The compensation that the interns get is education, knowledge, problem solving skill sets, equipment experience, the list goes on and on. They will work any where from 20-99 hours over the course of 3 months. They sign legal documentation that expressly states they working for this exchange. I require school paperwork, they set their own schedule, etc. I think you can interpret the law (as written in this article) however you like, but when it comes down to brass tacks the interns don't have a leg to stand on because I follow the ridiculous 6 rules.
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.

I would like to see documentation from settled cases where the intern had won, because I bet the situation would be so far removed from what I offer and provide my hard working over achieving interns. Otherwise quit busting my balls about sharing years of experience with my interns, encouraging them to think outside the box, take them to lunch as appreciation, etc. I think the old adage biting the hand that feeds you comes to play. Look if you have a case like the Mom wrote above where your dealing with Shady people, then STOP GOING!.. and I agree with the person who wrote about what Judge Judy would say "Why didn't you stop this earlier?"

Talk to the person in charge of internships at your school. Figure it out. If its ILLEGAL then all the parties responsible would be drug through the mud continuously... and they're not.

[sorry]

http://www.dol.gov/esa/whd/opinion/FLSANA/2004/2004_05_17_05FLSA_NA_internship.htm

http://www.dir.ca.gov/dlse/opinions/1998-11-12.pdf

Straight from the horses mouth. first one is a link from US dept. of labor

The second is a letter from an attorney working for the state of California stating the states position on internships and employees.

Calling someone an intern doesn't mean that's what they are.

[Your Worst Nightmare]

I don't give a flying "F" what the law says. If you jack me on my pay I'm going to your house, not the court house either!! If you're lucky, you'll still be able to use your hand to sign the check in what ever amount I tell you to!

[Marshall Fox]

You've been harassing people who post ads to hire interns on Craigslist for quite sometime now, and posting false information on this blog regarding labor laws.

We have contacted our law firm to pursue a legal action against you and this blog.

You are also in violation of the Craigslist Terms of use, by contacting the job ad for other than seeking internship. Your blog has been reported to the California department of labor, and the federal department of labor, for misrepresenting the law. We have also contacted Typepad, and privacy.net, where you created the email address to harass people.

Your information will be revealed from Typepad in the lawsuit against you, including your personal information from privacy.net, where you created the email address me@privacy.net, which you use to harass people.

We encourage anyone who receives harassment email from this blogger, to report him to Typepad and the labor department for misrepresenting their laws, which is clearly a state and a federal crime.

[John Mclallen]

The owner of this blog is fake, and he claims to be an attorney under the name Michael Tracy. He uses a false mailing address on his website http://www.michaeltracylaw.com/. The mailing address belongs to a legitimate law firm called Mandour & Associates. Their website address is http://www.mandourlaw.com/. We contacted the firm about this guy Michael Tracy. They don't know of such a name, and they are pursuing legal actions for falsely using their mailing address.

[n]

U.S. Department of Labor has outlined a list of criteria url is brokern

[www.facebook.com/profile.php?id=546777322]

Alicia is an exploiter plain and simple. The issue is entirely a matter of degrees (so to speak). Nobody is saying that an intern is experienced enough to be a regular employee or that most companies offer no training. The only point of the article is that the intern is entitled to MINIMUM wage(s). That's right - wages commensurate with experience.

All of the people who slap themselves on the back for helping out students while not paying them have already convinced themselves that they are doing the right thing. They are not, ethically, morally, if not legally. The minimum is greater than zero.

[noelle]

Domestic Goddess please contact me magicgoose98@yahoo.com

[Ruben]

I have to thank the person who let me to this blog. Very informative! I was 'interning' at an interior design firm, but all they had me doing was driving all over LA in traffic picking up samples, so I left and told them I'm not learning anything from sitting in traffic.
I will use this article as a guide. THANK YOU!!!!

[Portia Iversen]

What about bartering for labor? For example if I am starting a new small business and agree to share a percentage of the profit in return for services rendered (ie marketing and PR, etc). Thanks! -P. Iversen

[Richard Parker]

This original poster is definitely a fraud. Unpaid internships are totally legal and a lifesaver for students who have no previous work on their resumes except lifeguard or McDonalds. Further, the internships are voluntary, so students can take them or leave them for a paying internship. During this ecomonmic nightmare, these internships are as close to an interview as some students might get. When I was finishing college I would have done anything to get a good job, including volunteering or interning, not email my Mommy. I have also had unpaid interns in my company and they do not lessen your load, they add to it.

[mike]

Anonymous you are ridiculous please read the federal guidline they are clear

4. The employer that provides the training derives no immediate advantage from the activities of the trainees

To answer the question wht arent there more lawsuits. there are lawsuits. Although when the economy is good you don't see as much internship 'opportunities" funny how that works. now that the economy is weak there is much more attention on this matter and more lawsuits to follow im sure.