Business/Finance

Unpaid internships triggering lawsuits

by Jane Briggs-Bunting

Unpaid interns feeling exploited may want to check out a web site launched by a NYC law firm, Outten & Golden LLP. The firm is trolling for more clients.

Internships are an important part of OTJ (on the job) training for many college and high school students, and others wanting experience for a career shift even years after graduation. It should be a terrific opportunity to learn if this is the career one hopes to pursue, network with potential references and maybe nab a chance at a job that could be opening. It can also be an opportunity for a mid-course correction when an intern discovers that the profession is not, after all, something he/she wants for a career.

But internships are also a way for some employers to exploit young and nowadays twenty and thirty-something talent and be too cheap pay for it. Where employers would get nailed with state wage and hour law violations, if a student is earning credit or if there is an educational benefit and they are not doing a job a paid employee would otherwise be doing, then it arguably becomes legally permissible to exploit them. And that is wrong.

Interns are starting to muster the backbone to object: Hearst Publications, Fox Searchlight and PBS’s The Charlie Rose Show are all facing lawsuits filed in the last year against them by unpaid interns.

And the NYC law firm, Outten & Golden LLP, as noted above, is hunting for more.

Time did two stories in May on the practice with an estimate that fully half the internships in the U.S. are unpaid. (Time reports it pays its interns but notes: “Limited exceptions may be made where appropriate, such as when a student is receiving academic credit and meets other requirements as well.” Hmmmmm.) The story also notes that nearly half of college students now work as interns as some point in their academic careers: “The National Association of Colleges and Employers reported that 50% of college grads in 2008 had held an internship, compared with 17% in 1992. But the Great Recession accelerated that boom. Today, an estimated one-third to one-half of the 1.5 million internships in the U.S. are unpaid.”

Internships have proliferated in business, public relations, advertising, engineering, media and other fields where hands-on experience can augment what was learned in a classroom..

In the journalism world, large daily newspapers, especially those with Newspaper Guild contracts, usually pay their interns. Even many smaller papers offer some sort of stipend to offset tuition costs for credit-bearing internships. Others would pay for stories at the freelance rate or, at a minimum, pay mileage. A small weekly newspaper in Michigan’s Upper Peninsula each summer hires two interns, gives them housing on beautiful and historic Mackinac Island and pays them, too, to cover the stories for one of its weekly editions. (Kudos to publisher and editor Wes and Mary Maurer.)

However, at other newspapers, as budgets got slashed and staffs laid off, fewer internships were offered, leaving students scrambling to find opportunities.

Broadcast outlets have traditionally and disgracefully not paid their interns (though there are a very small number of exceptions). Interns sometimes work up to 40 hours a week for the privilege of fact checking, coffee getting, job shadowing, even dog sitting for various on-air personalities. True, some of these “opportunities” lead to fulltime work, but it is a shameless exploitation reminiscent of apprenticeships two centuries earlier. A child is farmed out to learn a trade. Unpaid, they at least were given food and shelter. The 21st century version gets neither. Those landing spots at network jobs often pay their own way to New York, including travel and housing, for the coveted and competitive opportunity.

Too often, however, only those students with financial support from parents or others using savings can afford a payless experience as an intern. The so-called Great Recession (it was a full depression in my opinion, but that’s a politically toxic word) created a surge in these unpaid internships. As fewer employees were expected to do more work, internships seemed like a way to cope.

Each state sets its own wage and salary laws, as do the feds. As noted in Josh Sanburn’s well-reported article in Time:

The federal “Fair Labor Standards Act of 1938…specifically lays out a 6-point test, still in use today, for hiring unpaid interns:

1. The internship must be similar to training that would be given in an educational environment;
2. The internship must be for the benefit of the intern;
3. The intern does not displace regular employees;
4. The employer derives no immediate advantage from the intern;
5. The intern is not entitled to a job at the end of the internship; and
6. The intern understands that he or she is not entitled to wages.”

With blue stocking law firms imploding, attorneys in others states might go fishing, as well. As the high season for internships is about to beging, employers should take note.

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