US Department of Labor Raises Concern Over Unpaid Internships

Internships are as a way to gain valuable experience in a field, make connections with important people, and greatly bolster a resume. However, the U.S. Department of Labor (DOL) is becoming increasingly worried that companies are violating federal and state minimum wage laws through their unpaid internships. The Fair Labor Standards Act (FLSA) requires most employers to pay employees a minimum hourly wage of at least $7.25, and each state can choose to enact requirements above and beyond this threshold. 

The FLSA sets six requirements that an internship must meet to be considered unpaid. The six unpaid internship requirements are that:

• The training is similar to what would be given in a vocational school or academic educational instruction;
• The training is for the benefit of the trainees;
• The trainees do not displace regular employees, but work under their close observation;
• The employer that provides the training derives no immediate advantage from the activities of the trainees;
• The trainees are not necessarily entitled to a job at the conclusion of the training period; and
• The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

According to research published by XpertHR, four employers in ten (44%) that offer work experience for students and graduates do not pay them a wage. In Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy, Ross Perlin estimates there are 500,000 unpaid interns in the United States, subsidizing America’s corporations over $2 billion a year. This may cause frustration among students because they either cannot afford to work an unpaid internship and are therefore denied the experience and resume-builder, or struggle financially because their unpaid internship took the place of a paid job.

Sadly, many illegal unpaid internships go unreported because interns are afraid that by reporting these abuses, they would somehow be adversely affected upon entering the working world. For this reason, federal officials believe that illegal internships are becoming commonplace, and are beginning to crack down on illegal unpaid internships. In California, officials have issued guidance letters telling employers whether they are breaking the law, Oregon regulators have found and corrected numerous cases of exploitation, New York is investigating multiple cases, and the Labor Department is stepping in on the federal level. 

People who work in unpaid private-sector internships can file a federal or state wage claim and could receive back wages, even if they agreed to work for free. If you or someone you know is being unjustly denied the minimum wage in an unpaid internship, contact an experienced minimum wage lawyer to see if you are eligible to receive back wages for your hours worked.