Internship series: Part 1 of 3

Before Letecha Dixon accepted an unpaid internship at Giant magazine last summer, she wondered if it would be worth the $3.40 each-way bus tickets from Englewood, N.J., to the city.

But after interning for three months and spending $300 on travel expenses alone, she decided it was not.

“I ended up paying for the internship,” she said. “But if you don’t have an internship, then people don’t even look at you when you apply for a job.”

Dixon, a junior public relations major at Syracuse University, was among an increasing number of students who are participating in unpaid internships at for-profit private sectors. Though there is no official count of the number of unpaid internships, concerns have risen about violations against the minimum wage and overtime laws established in the Fair Labor and Standards Act. The wage and hour division of the United States Department of Labor released “Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act” on Wednesday to redefine the test for unpaid interns.

“The key issue is whether or not an internship is true employment or whether it is something different — a learning experience — and should be treated differently under the law,” said Albert Cabral, director of internships at Nazareth College.

The test follows six criteria that for-profit businesses must meet if they do not pay their interns. The Supreme Court developed the original criteria in 1947.

“The economy and the state of higher education was hugely different then it is now,” Cabral said. “What came out (of ‘Fact Sheet #71′) was an attempt to clarify the guidelines a bit.”

But Rhona Jones, an internship coordinator at Syracuse University, said the situation for unpaid interns remains unclear, though the wording of the criteria has changed.

One of the guidelines, for instance, states the employer may not derive any immediate advantages from the intern’s activity. But Michael True, director of the internship center at Messiah College, said there is no way to get around the fact that all employers who take on interns benefit from the work performed by the intern.

When an intern is given an assignment, both the intern and the employer gain an advantage, said True, who also runs InternQube.com, a national internship listserv with more than 700 professionals. The intern gains a learning experience during the process of completing the assignment, and the employer gains the final product, which can be used to help the business, he said.

Interns may impede the regular operations of the business, as stated as part of the criteria for unpaid interns. That’s because employers will have to take on extra work, such as hosting site visits, developing learning goals or filling out evaluations, in addition to their usual workload, Cabral said.

“We’re asking them to do a whole lot more than they would for a regular, temporary employee,” he said.

The test for unpaid interns also states the internship should be similar to training that would be provided in an educational environment; the internship experience should benefit the intern; the intern may not displace regular employees but works under the supervision of existing staff; the intern is not entitled to a job at the end of the internship; and both the intern and the employer understand the intern will not be paid during the internship.

But the strict enforcement of these six guidelines may scare off potential and existing employers who offer internships, True said. This may not matter too much for the employers, but students will suffer from the lack of available internships, he said.

“If we push this too far, small- and medium-sized businesses — which are the economic engines of the U.S. that generate the jobs — if severe restrictions are put on them, then they will think it’s too much of a hassle,” he said.

Some employers offer unpaid internships but require students to register for academic credit as proof of a learning experience, Jones said. But many students cannot afford to pay for credit, especially during the summer when financial aid is limited, she said.

“Not only are students taking an unpaid internship to get experience, but also, there is an additional amount of tuition they need to come up with,” she said.

The government will penalize for-profit businesses that are caught violating the six criteria, said Shlomo Katz, a counsel who practices wage and hour law at Brown Rudnick LLP. They will have to pay the intern back wages, which may be doubled in some cases, and the Department of Labor may ask the court to impose someone to supervise the employer so it will follow the law in the future, he said.

Though it is hard to know how often businesses violate the test for unpaid interns, the Department of Labor conducts thousands of random checks on employees throughout the year, Katz said. Interns may also file formal complaints to the Department of Labor if they feel a business is not following the six criteria, he said.

But True said most interns do not want to raise a formal complaint because they are concerned about the consequences, such as not being hired by the company for which they interned or by other employers who hear of the complaints.

“When an intern’s goal is to learn about a company and to get experience, their motivation to not rock the boat is pretty strong,” Jones said.

It is the supervisor’s responsibility to ensure a quality and educational experience for the interns to help them grow as professionals in their fields, Cabral said.

“There is a lot more emphasis on learning and professional development in an internship than there is at a job,” he said. “An intern is not an employee. An intern is not a worker. An intern is an intern.”

Published on April 25, 2010 at 12:00 pm