Friday, April 23, 2010

USDOL Tells Unpaid Interns They Don't Have to Clean the Breakroom Anymore

The U.S. Department of Labor just updated the rules governing unpaid internships. The USDOL is responding to the spate of bad press about unpaid internships over the last month, most notably this April 2 New York Times article.

Here are the updated rules for companies that use unpaid interns:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

In other words, the employer can't make an unpaid intern do the dishes in the break room under the guise of an "educational experience." The Department of Labor goes on to say:

If all of the factors listed above are met, an employment relationship does not exist under the FLSA, and the Act’s minimum wage and overtime provisions do not apply to the intern. This exclusion from the definition of employment is necessarily quite narrow because the FLSA’s definition of “employ” is very broad. Some of the most commonly discussed factors for “for-profit” private sector internship programs are considered below.

The USDOL is effectively saying, "We're onto you employers and there will be consequences if you mess up."

A few aspects of the unpaid internship debacle still fascinate me, though. For one, shouldn't universities be charging less for internship credits if the internship is unpaid? It seems unfair that cash-strapped students doing unpaid internships for college credit still have to pay full freight for those college credits as if they're getting paid. Maybe universities should give students with a demonstrative financial need a small scholarship to help defray the costs and make the internship possible?

There are important issues of class, wealth and opportunity here. A great story would be checking in with Gen X employees in their 30s and 40s and asking them to look back on how access to internships, both paid and unpaid, has impacted their careers. If two employees are doing the same job, where have their respective paths taken them if one employee could afford to take a glitzy but unpaid internship in New York City for the summer but the other employee could not?

Second, I wonder about the symbiotic relationship between employers, universities, university endowments and unpaid internships. The Great Recession has taken a toll on university endowment funds. If colleges and universities aren't raising as much money from alumni, it seems only natural they would aggressively approach corporations. If a corporation donates money to a university's endowment fund, however, is the university going to be as willing to crack down on the corporation for not paying student interns and making them perform tasks that aren't educational? Universities receiving millions in donations from corporations in a recession probably aren't going to be as willing to bite the hand that feeds.

Anyway, it's an interesting topic.

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