Intern Pay

Paid vs. Unpaid Internships

Previously, a lawsuit in New York ended in favor of interns receiving pay for their work as Production Assistants on the set of Black Swan. This newsworthy story and the rising necessity of internships has made intern wage a growing conversation topic. As Al Jazeera noted, "According to a survey-based study by the National Association of Colleges and Employers (NACE), a record 63% of 2013 graduates had completed an internship." Internships are one of the best ways to get a full-time job offer. Indeed, "The value proposition is clear: According to the NACE's 2010 Job Outlook Survey, 75% of employers prefer job candidates with relevant work experience. More than 90% prefer to hire interns or co-ops who have worked for their organization" (Al Jazeera). So now that we know how important internships can be, it only makes sense to learn more about how internships function.

Internships can be separated into two categories: paid and unpaid. Depending on economic status, some people will not be able to swing an unpaid internship. For example, needing to work while in college may not leave much time in the day for an unpaid internship. However, those who can afford to not work while in school or over summer vacation, have ample time to work for free. Additionally, payment is sometimes judged based on the individual's necessity of the internship. For example, often students seek any type of internship to fulfill academic credit, and some employers are aware of this. In the previously quoted Al Jazeera article they said,

"When Pauley ruled for the Black Swan interns, he closed the imaginary college-credit loophole. Academic credit, he wrote, does not certify an internship as educational. Work experience is a result of all employment; it does not replace payment. Rejecting any sort of free association argument, Pauley reminded the defendants 'that the Fair Labor Standards Act (FLSA) does not allow employees to waive their entitlement to wages.' The minimum wage is not merely a recommendation, and young workers need to get used to feeling entitled to it." 

Furthermore, paid and unpaid interns have slightly different rights which makes the pay level about more than money. Unpaid interns are not covered by Title VII of the 1964 Civil Rights Act. A paid intern is considered a temporary employee and is protected by civil rights laws. There are six standards that must be met in order to establish an intern as unpaid. According to the FLSA these six standards are:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar 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.

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

(U.S. Department of Labor Wage and Hour Division, April 2010)

If an internship qualifies as a paid position, interns legally must be paid the federal minimum wage (at the very least) for the services they provide within the “for-profit” or private sector. They must also be paid overtime. Both regulations fall under the Fair Labor Standards Act (FLSA). The distinction that needs enforcing is that internships are for educational training rather than having interns do the work of regular employees. Many employers spend considerable time training and mentoring their interns and do not derive much benefit from having them complete an internship with the organization. While other organizations expect interns to jump right in and do the same work as a regular employee. An unfortunate result of strict adherence to interpreting these guidelines in the issue of the legality of unpaid internships could make it more difficult for students to find internships in the future.

Making this distinction between paid and unpaid internships may not be good in the long run, or at least some people think so. Thoughts are that instead of companies going from unpaid internships to paid internships they will just have no internships. With less internships to choose from, less people will have the opportunity to learn and grow in the workplace. Only time will tell if the outcomes of this outrage will be positive or negative. The Atlantic Monthly magazine compiled a list or reasons why unpaid internships are a bad thing. Additionally, they included the counter argument that unpaid internships are a good thing. Check out the Texas Workforce Commission to learn more about internship guidelines specific to Texas.

Created By: Alanna Gray