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

[Beth St. James]

What is your opinion of the following job posting:
http://www.fiaf.org/jobs/index.shtml

[internet merchant accounts]

If there's a substantial contribution to the company's operations, then interns are entitled to at least a minimum wage.

[F Horn]

I hope you continue doing what you do because it's so good!

[scm]

After read a couple of the posts on your site these few days, and I really like your style of blogging. I added it to my favorites internet site list and will be checking back soon.

[Jaime]

I’ve had three unpaid internships and the connections and experience I’ve gained have been well worth it. However, I don’t think it would have been possible if I were in a different financial situation. I think that companies that offer paid internships should take economic standing into consideration and offer paid internships to the financially disadvantaged.

On another note, there’s an interesting, brief video NY Creative Interns made that breaks the 6 requirements down for you. http://bit.ly/kfwPXE

[Logo design]

So far it has been a great experience for me since I visited this website for the first time. Thank you for sharing such information.

[SANDIP GOPE]

With due respect SIR,I want to inform you that,I Sandip Gope have successfully completed my Two and a half months of Project Dessertation Programme in REBI .Even though I have submitted my soft as well as the hard copy of the Project as approached by Mr. Braj Kishor Gupta|Head-Bangalore Centre | REBI | but still I have not received my stipend amount as promised by them.I have spoken to Mr.RAVI and Mr GULSHAN who were our supervisors,several times on this regards,but still its pending on their behalf.Even i have consulted Mr RAJPUTH(PTO) regarding the same but there has been no action against it and its not only me who is facing the problem even the other interns who had undergone this internship.

So I humbly request you to look into this matter with concern and help us regarding the same.
sandip gope
procurement executive(flipkart)
9743746851

[Georgia Lemon Law]

Great Information... Please post more... Thank you

[Blahberstein]

Marshall...you're retarded. Blogging, in this case, does not constitute legal advice. So, not illegal. Also, the Craigslist contact issue is only with regard to the job...not just because you want to chat. What's your number, again? ;)

Alicia...quit kidding yourself, sweetheart. You pulled yourself up by your bootstraps...great...so what? Pay your damn interns minimum wage or consider it a public service to your community by training them so you can hire them. Using unpaid interns to profit is illegal. Anyone who says otherwise is just an agency or scumbag who's upset over people becoming empowered.

DomesticGoddess...what the eff? Really? Sounds like you need some serious help - possibly psychological. There's something wrong with your daughter, allowing herself to be taken advantage of/abused like that.

[uff the fluff]

http://www.nytimes.com/2010/04/03/business/03intern.html

It does appear that many Attorneys General consider unpaid internship a violation of minimum wage laws.

[Account Deleted]

Nice post. Thank you very much for sharing interesting post. Sometimes employer/employee relationships can be tricky, and issues often arise that can only be resolved by an attorney who practices labor law. While labor law lawyers can work for either an employer, employee or union, some choose to work on behalf of the employee. I have read more about How Labor Law Lawyers Protect the Rights of Employees at http://www.laborlawlawyers.org/How-Labor-Law-Lawyers-Protect-the-Rights-of-Employees.html

[Personal Injury Compensation]

I am impressed with your ratiocinations. Would definitely keep a check here.

[The Interns]

Help us! We need people to comment on their personal experiences, it can be done anonymously. This unqualified producer is a scam artist on all levels, breaking labour laws by employing over 100 interns with no management and is embarrassing our city. This is not a pro or amateur situation, it's about a man that cons designers (from abroad) uses students and makes inappropriate passes at them, low production quality and pocketed sponsorship dollars. It's called a scam. And it has been overlooked for years.
On Monday this goes to the press...and on Wednesday our Mayor.

Please say something on there!

www.vancouverfashionweak.com

[The Interns]

Help us! We need people to comment on their personal experiences, it can be done anonymously. This unqualified producer is a scam artist on all levels, breaking labour laws by employing over 100 interns with no management and is embarrassing our city. This is not a pro or amateur situation, it's about a man that cons designers (from abroad) uses students and makes inappropriate passes at them, low production quality and pocketed sponsorship dollars. It's called a scam. And it has been overlooked for years.
On Monday this goes to the press...and on Wednesday our Mayor.

Please say something on there!

www.vancouverfashionweak.com

[James]

Great article. Very interesting to know.