The Nation's Morgan Ashenfelter on the “The (Il)legality of Unpaid Internships”

In a February 3rd posting on the Nation blog, Morgan Ashenfelter uncovers the increasingly prominent legal issues behind the unpaid internship phenomenon:

The United States Department of Labor provides six criteria that must all be met for the student to not be considered an employee and therefore does not have to receive compensation.

The six criteria include:

1. "The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
2. The training is for the benefit of the trainee;
3. The trainees do not displace regular employees, but work under close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer's operations may actually be impeded;
5. The trainees are not necessarily entitled to a job at the completion of the training period; and
6. The employer and the trainee understand that the trainees are not entitled to wages for the time spent in training."

Most of these rules are easily met, but rule four is problematic: that the employer "derives no immediate advantage from the activities of the trainees." Unless the only task an intern is doing is literally fetching coffee, any other activity no matter how mundane could be seen as a benefit (and depending on how sleep-deprived the office is, providing coffee might even be considered such). If the employee that would normally be making copies is freed up to be more productive because of an intern, isn't that "immediate benefit" derived directly from the intern?

(...) Beyond the question of legality, unpaid internships are still morally questionable and downright exploitative. After all, if you're a for-profit company who can't afford to pay a worker minimum wage, you might want to reevaluate your business model.

So while most of these popular unpaid positions may be, by definition, illegal, their recent explosion can be attributed to one glaring economic reality: massive recession-induced unemployment and layoffs. These ongoing hard times have resulted in a new wave of professionals willing to work for free in order to get a leg-up. And despite their exploitation, many interns refuse to take legal action, either out of fear of being blacklisted, or due to lack of information about their legal rights.

Visit the Nation to read Ashenfelter's article in full. For a comprehensive assessment of internships, see Intern Nation, forthcoming from Verso in April 2011, in which Ross Perlin covers the political, legal and social issues tied up in the internship explosion. Sure to both shock and enlighten readers, we hope that it will also effect real change in the way that companies around the world do business. For more on Verso's internship policy, and on Intern Nation, see "Verso shamed by Ross Perlin, intern buys groceries," by Morgan Buck.