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Regulating The Exploitation of Unpaid Internships

The Obama “Crackdown:” Another Failed Attempt to Regulate the Exploitation of Unpaid Internships

By Sarah Braun

Most jobs, regardless of whether they are paid, unpaid, volunteer, or temporary positions, offer very different experiences. Unpaid internship experiences, in particular, have become progressively diverse as the number of interns increases nationwide. While some of these unpaid positions are highly exploitative, there are also a significant number of internships that offer valuable educational and professional experiences. The following two stories exemplify the extreme diversity that exists among the unpaid internship experience.

Jessica, a college student at New York University, was enthusiastically looking for an internship for the summer following her sophomore year. Jessica was eager to pursue a career in animation. Although she had no experience working in the industry, she felt an internship would be the best way to find out whether this was, in fact, her dream job. After months of searching, she finally secured an internship with a mid-size animation studio in Lower Manhattan. Although the position was unpaid, Jessica was promised that the internship would be highly educational and might potentially lead to some very good jobs in the future. Jessica was thrilled because she truly believed that this internship would finally give her the chance to learn hands-on about the inner workings of animation, and provide her with invaluable opportunities to network with people in the industry. Unfortunately, Jessica’s fantasy did not materialize. On her first day as an intern, Jessica was directed to the facilities department. Jessica’s assigned work had nothing to do with animation. Instead, Jessica’s work involved cleaning the kitchen and bathroom facilities. Because she was interning during the swine flu epidemic, Jessica was also expected to wipe the doorknobs each morning in an attempt to reduce the spread of the disease. Regrettably, Jessica’s dreams were quashed that summer. She did not learn anything about animation. Instead, she left that summer feeling deceived and misused.

On the contrary, Sam’s unpaid internship proved to be an invaluable life changing experience. Sam was a 22 year-old college graduate with a degree in American history. Unlike Jessica, Sam had no particular long-term career goals. He was desperate to find something that might interest him. In his last semester of college, Sam began searching for possible internships. Sam applied to a number of different companies in a vast variety of industries. Although a bit dubious about his interest in public relations, Sam accepted a six-month unpaid internship in the media relations department of a professional sports team. He was immediately assigned various tasks such as drafting news releases, clipping newspaper articles, and assisting with the community relations programs. In addition, Sam was permitted and even encouraged to participate in brainstorming sessions with high-level executives. Despite Sam’s lack of experience, his opinions and thoughts were received with the same respect granted to full-time employees. Unlike Jessica, Sam was learning new things all the time. Although Sam did not enjoy every single aspect of the experience, he complied with his duties because he had found something that he truly enjoyed doing. Sam continued to work as an unpaid intern until the company could afford to bring him on as a full-time employee. Today, Sam owns his own PR firm that specializes in sports media. Although it was difficult to work without compensation, Sam consistently credits his success to his internship experience. Without that experience, Sam doubts he would ever have found the career that he loves so much today.

Although both Jessica and Sam had similar goals for their internship experiences, only Sam had the opportunity to gain insight into his possible career path. In reality, this inconsistency of experience involving unpaid internships is not uncommon. While the exploitation potential for unpaid internships often appears greater given the mere nature of the unpaid position, there are a vast number of individuals like Sam who end up having life-changing experiences. Given this extreme disparity among unpaid internship experiences, how does the government effectively monitor these placements to eliminate the “bad” internships without jeopardizing and interfering with the “good” internships? To answer this question, however, the government must first recognize, and more importantly appreciate, the fundamental relationships among students, employers, and academic institutions that inevitably develop with respect to unpaid internship opportunities.

As the number of unpaid internships increases nationwide, discrepancies in internship experiences increase and become proportionally more difficult to manage. While the number of students participating in internships has consistently grown over the past few decades, today, in the midst of a catastrophic economic recession, the number of unpaid internships has skyrocketed. Research by the College Employment Research Institute and Intern Bridge found that three-quarters of the ten million students enrolled in four-year colleges and universities in the United States will work as interns at least once before graduating, and roughly one- third to one-half of these interns will not receive compensation. Although no official number exists that quantifies the prevalence of internships in the United States, evidence clearly shows that as job prospects diminish, unpaid internships flourish. For example, job-search sites such as Monster.com and CareerBuilder reported significant increases in internship postings. Even Stanford University’s career center reported that it posted 643 unpaid internship opportunities on its job board in 2010, which was more than triple the amount posted two years ago.

Internship experiences are professionally invaluable. While not every internship can guarantee professional success, “unpaid internships are a great way to enter the work force.” An internship is valuable because it provides the necessary hands-on learning experience that many employers ultimately require. In fact, many employers “really prefer to hire a student who has experience in their field through an internship or something similar, rather than a student without any experience.” Moreover, an internship is an important professional stepping-stone because it offers the intern the opportunity to “audition” for the prospective employer, which could very well lead to a compensated position at a later time. Individuals are willing to work for free because internships are considered “the most bankable credential you can put on your resume.”

The significance of internship experiences has constantly been rising; however, in today’s economy, unpaid internships are even more valuable than ever before. According to a 2010 survey by the National Association of Colleges and Employers (NACE), the most frequently expressed sentiment by college respondents was that “[a]ll internships, even those that are unpaid should not be restricted.” One respondent, in particular, even noted that “[a]ny internship is better than no internship.” With limited employment opportunities, unpaid internships are often the best alternative for college graduates who desperately need to expand their resumes and acquire professional experience. Moreover, unemployed middle-aged professionals are even accepting unpaid internships in hopes of minimizing large gaps in their resumes. Even though jobs are scarce, college graduates and professionals “are often willing to work for free in hopes that it will help them land a paying gig.” In this economy, an internship is often their only hope.
This significant growth of unpaid internships over the past few years, while advantageous for many students and unemployed professionals, has continued to raise concern for many federal and state officials. Fearful that this internship upsurge would enable many more employers to abuse the minimum wage laws by exploiting interns as free labor, the Obama administration decided to “step up” enforcement. In April 2010, the United States Department of Labor (DOL) announced its plan to “crackdown” on unpaid internships by releasing guidelines which clarified the legal requirements for internship programs under the Fair Labor Standard Act (FLSA). These guidelines specifically set forth legal criteria that must be satisfied for internships to be legally unpaid. Given these strict criteria, the DOL forewarned that “[i]f you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law.”

While regulation is necessary to protect individuals from exploitative environments, these new “crackdown” efforts have likely had “a chilling effect on all internships” because the threat of increased scrutiny inevitably impacts the willingness of employers to offer internships.” These “crackdown” measures, by eliminating important internship opportunities, essentially harm the very same individuals the DOL regulations intend to protect. Rather than intimidate employers and reduce the availability of unpaid internships, the Obama administration should focus on implementing regulation that specifically resonates with the fundamental role unpaid internships play in our economy, especially during this current period of economic uncertainty. To regulate unpaid internships without eradicating the entire internship market, the DOL must implement a new standard that penalizes the “bad” internships without interfering with and disrupting the “good” internships. Developing such a standard, however, ultimately requires an understanding of the dynamics among students, employers and academic institutions.

To continue to read the full article, please visit http://www.swlaw.edu/pdfs/lr/41_2braun.pdf
Westlaw Citation: 41 Sw. L. Rev. 281

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