{"id":4296,"date":"2012-02-09T16:04:00","date_gmt":"2012-02-09T21:04:00","guid":{"rendered":"http:\/\/journals.law.harvard.edu\/crcl\/?p=4296"},"modified":"2016-11-16T20:13:12","modified_gmt":"2016-11-17T01:13:12","slug":"unpaid-internships-are-they-legal","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/crcl\/unpaid-internships-are-they-legal\/","title":{"rendered":"Unpaid Internships: Are They Legal?"},"content":{"rendered":"

Last week, a former unpaid intern sued her former employer for violating federal and state minimum wage laws.\u00a0 According to the lawsuit<\/a>, Xuedan Wang alleged that she had worked around 40 hours per week at fashion magazine Harper\u2019s Bazaar throughout the fall of 2011, where she \u201ccoordinated pickups and deliveries of fashion samples . . . .\u201d\u00a0 Ms. Wang\u2019s attorney stated that<\/a> “unpaid interns are becoming the modern-day equivalent of entry-level employees, except that employers are not paying them for the many hours they work. The practice of classifying employees as ‘interns’ to avoid paying wages runs afoul of federal and state wage and hour laws.”<\/p>\n

Ms. Wang\u2019s claim is based upon much more than an abstract policy argument over the fairness of unpaid internships.\u00a0 Generally speaking, individuals who work in the private sector must be compensated under the Fair Labor Standards Act (\u201cFLSA\u201d).\u00a0 Exemptions from this federal statute\u2019s wage and hour provisions are very limited, especially in regards to work performed by employees in the \u201cfor-profit\u201d private sector.\u00a0 The U.S. Department of Labor, responsible for enforcing the FLSA, released a document<\/a> in 2010 stating that six criteria must be met<\/em> in order to exempt a \u201cfor-profit\u201d private sector employer from having to pay interns.\u00a0 Those criteria are:<\/p>\n

    \n
  1. The internship must be similar to training given in an educational environment (in other words, provides vocational skills…answering phones and getting coffee do not cut it<\/em>).<\/li>\n
  2. The internship must be for the benefit of the intern (the value of the educational experience must predominate over the value of the work that the employer receives<\/em>).<\/li>\n
  3. The internship must not displace regular employees.<\/li>\n
  4. The employer must derive no immediate advantage from the intern\u2019s activities.<\/li>\n
  5. The intern must not necessarily be entitled to a job at the internship\u2019s completion.<\/li>\n
  6. The employer and intern must both understand that the intern is not entitled to compensation.<\/li>\n<\/ol>\n

    Photocopying, pouring coffee, and answering telephones certainly do not meet such requirements.\u00a0 Over one million Americans work as interns each year, and about half<\/a> are not paid.\u00a0 Many of these unpaid positions should be paid under the Department of Labor\u2019s criteria, but a lack of enforcement has allowed such non-payment to persist.\u00a0 Under the Fair Labor Standards Act, the unpaid interns have standing to sue their employers over wage and hour violations, but the Department of Labor can also bring such lawsuits (regardless of whether the \u201cunpaid intern\u201d wants such a suit to proceed).\u00a0 More vigorous enforcement of unpaid internships must start with the Secretary and not the unpaid interns themselves.\u00a0 Some interns do not know of their rights, others worry about offending their employer.\u00a0 There is also the worry that suing or even just complaining might make it prohibitively difficult to secure a \u201creal job\u201d in the future.\u00a0 As a result, it is unlikely that students will step forward\u2014like Xuedan Wang has done\u2014with any regularity.<\/p>\n

    The question thus becomes: should the Department of Labor, which has very scarcely enforced FLSA protections on behalf of unpaid interns, step up enforcement efforts and attempt to broadly enforce that interns be compensated (except for the uncommon situations in which the six criteria are met)?\u00a0 Last weekend, the New York Times<\/a> got into the debate, posting the opinions of five different commentators that specifically addressed this question: \u201cDo Unpaid Internships Exploit College Students?\u201d\u00a0 In many ways, the answer is yes.\u00a0 Going back to Ms. Wang\u2019s complaint:<\/p>\n

    \u201cEmployers\u2019 failure to compensate interns for their work, and the prevalence of the practice nationwide, curtails opportunities for employment, fosters class divisions between those who can afford to work for no wage and those who cannot, and indirectly contributes to rising unemployment.\u201d<\/p><\/blockquote>\n

    If unpaid internships are allowed to persist when the six criteria have not been met, employers will continue to have a strong incentive to re-brand the division of labor within their businesses, replacing paid internships and\/or full-time jobs with unpaid internships to save on labor costs.\u00a0 In this tough economic climate, employers have an even greater incentive to use unpaid labor, because there is a larger pool of students and employees who cannot find work, and many of these people will work for free in hopes of turning the unpaid work into a full-time job or believing that the resume addition will make it easier to find a job elsewhere.\u00a0 Additionally, unpaid internships exacerbate social class divisions.\u00a0 Certain industries in particular, such as publishing, journalism, and entertainment, \u201cnow virtually require a period of unpaid work, effectively barring young people from less privileged backgrounds [from entering those professions],\u201d writes Ross Perlin<\/a>, author of a book<\/a> about unpaid internships.\u00a0 The extremely fortunate recent college graduates who can work for a publishing company in Manhattan without an income thanks to their parents have an enormous advantage in this competitive job market.<\/p>\n

    The Fair Labor Standards Act implies that the Department of Labor should enforce this provision vigorously, regardless of opinions about whether unpaid internships do more harm than good or vice versa.\u00a0 An economic argument can certainly be made<\/a> that unpaid internships\u2014assuming the intern chooses such a position voluntarily\u2014make both parties better off: they provide valuable opportunities to both the employer and the intern that would not otherwise exist, and thus such opportunities should be permitted.\u00a0 The remedial nature of the FLSA, however, rejects this free-market approach.<\/em>\u00a0 An analogous situation is arguing against having a minimum wage.\u00a0 There are meritorious economic arguments in favor of abolishing the minimum wage, but such arguments cannot free employers from paying it. \u00a0 By passing the FLSA, Congress implicitly decided that the protection employees receive from a minimum wage outweighs the downside of discouraging employers from hiring when employers cannot pay at or above this price floor.\u00a0 Requiring employers to pay most private-sector interns serves the same goals: protecting against exploitation that exists when there is an imbalance of bargaining power between employers and employees is presumed to be more important than the opportunities that are lost as a result of this mandate to pay.\u00a0 Nothing in the Fair Labor Standards Act lets employers treat \u201cinterns\u201d any differently than \u201cemployees,\u201d unless the internship is truly \u201ctraining\u201d that meets all six criteria described above.<\/p>\n

    Enforcing the statute vigorously (again, only in regards to the \u201cfor-profit\u201d private sector) would not have any catastrophic affects; the argument that many opportunities would disappear because employers cannot presently afford to pay their interns seems unconvincing.\u00a0 If an intern\u2019s work is worth less to the employer than the minimum wage, then the intern is probably not missing out on very much of an opportunity.\u00a0 Enforcement of the statute would compel most employers to pay their interns at least minimum wage as compensation for the enormous amount of value that hundreds of thousands of unpaid interns are creating each year.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Last week, a former unpaid intern sued her former employer for violating federal and state minimum wage laws. Over one million Americans work as interns each year, and over half are not paid. Many of these unpaid positions should be paid under the Fair Labor Standards Act, but a lack of enforcement has allowed such non-payment to persist.<\/p>\n","protected":false},"author":52,"featured_media":4298,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center 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