Unpaid internships may be illegal

Unpaid internships — growing rapidly in a bad economy — may violate minimum-wage laws, federal and state regulators tell the New York Times.

According to federal law, unpaid internships at for-profit employers should resemble vocational or academic training; the intern must not displace regular paid workers and the employer should  “derive no immediate advantage” from the intern’s work. It’s awfully hard to design a job that provides no benefit to the employer and is educational for the worker.

In 2008, the National Association of Colleges and Employers found that 83 percent of graduating students had held internships, up from 9 percent in 1992. This means hundreds of thousands of students hold internships each year; some experts estimate that one-fourth to one-half are unpaid.

I’d bet that many internships that used to be paid no longer carry a salary.

Many students do get valuable work experience and contacts from unpaid jobs, even if they do relatively menial work. That’s why they take the jobs. I know my nephew, who’s majoring in computer science with a video-game design specialty, applied to unpaid internships. (So far, no success.) He’d love to work for free as opposed to not working at all.

Non-profits can accept volunteers without penalty. My daughter is an unpaid lawyer for the San Francisco Bar. (She’s on half pay from the law firm that offered her a job and then asked her to wait a year to start.) The pro bono program has been flooded with unemployed and underemployed lawyers eager to work for nothing so they can impress a future employer.

Update: College grads looking for work had better have a Plan B, reports the Wall Street Journal.

About Joanne


  1. There’s a reason why the minimum wage is known, in economic terms, as cutting the bottom rung off the ladder. Idiotic meddling by economic illiterates like this serves to do nothing but eliminate the first level of opportunity for beginners.

  2. Don Bemont says:

    Kind of a damned if you do, damned if you don’t situation.

    Very few of us want to see our students unable to pick up a little on-site experience in their intended field. On the other hand, very few of us want to see those same students unable to find paid work upon graduation because employers are avoiding hiring by using interns.

    An extremely tough job market like this, though, will inevitably lead to two results — employers telling employees to like it or leave, and the unemployed being quick to cry foul if employers find ways around the rules to avoid hiring.

  3. Speaking of idiocy, Obi-Wandreas outdoes the willful ignorance of the masses. Which flavor Kool-Aid, I wonder.

    Joanne hits the nail on the head precisely. This is a mechanism by which “employers” get to squeeze out more labor with no financial incentives. “Obi” could use a little bit of education – try reading not only Joanne’s article, but the NYT source article. That is if you can get past the willfully ignorant part of your mindset.

  4. Michael E. Lopez says:

    Like Obi-Wandreas, I tend to think that unpaid work shouldn’t be illegal, BUT… (and there’s always a BUT, isn’t there?)

    Unpaid internships are a really excellent social tool for damping economic mobility. Poor kids can’t really afford to take unpaid jobs and turning it into a “class” for credit just means taking fewer actual classes that you’re paying for — in effect, it’s not just an unpaid internship; YOU’RE paying to work.

    Also, unpaid internships are notoriously subject to interpersonal favor. It’s not like the company is paying for the spot, so really, what’s the concern with getting the best person for the job when you can “hire” your golf partner’s daughter and make people immediately happy?

    I remember vividly the day I discovered that there were unpaid internships in the world. I was stunned. I was positive I had misheard. It made no sense… and the reason it made no sense is that I hadn’t grown up in the right socioeconomic environment. I eventually learned… but the whole thing sounded fishy from the start and that hasn’t changed.

  5. Part of the reason why all these educated young people are flooding the intership market (guaranteeing that the internships will be unpaid), is that their parents don’t seem to have the attitude that my (depression-era) parents had: get a job out in the real economy, even if you are overqualified for it, so you’ll know what the real world is like and get a start on paying your own way. I have actually met parents who think that working in the types of real-world jobs that less-educated young people work in, would be a waste of time for their kids. Go figure.

  6. Anthony says:

    If it’s menial work, get a job as an office temp (or warehouse temp), where you’ll get paid for doing it. If it’s more valuable work, the employer should pay something for it, even if that something is below the entry-level salary.

  7. I have been told that getting the contacts and experience from a law firm (no matter the size) with an unpaid intership seems to be the only way that a first year law student can get in for the following year. Why does the internship have to be unpaid? why can’t they be paid at least minimum wage? why do the law students have to have the consent of the law school? Even in this economy, the financial burden is awesome. Basically, the law student will pay upwards of $4000 for three moths of “free” experience and learning. To be an attorney, the admission fee is very high debt, and in this economy – that is a bad thing.

  8. tim-10-ber says:

    With unemployment for 16-24 year olds and as a parent of kids in this age range an internship or volunteer work where they can get a legit recommendation is fine with me…otherwise there is very little chance of them getting hired even at minimum wage when they are competing with experienced workers willing to settle for $7.25 an hour…

  9. In the labor market the market rate for this labor is $0. If the gov’t intervenes it will force up the price and drive down the demand. I’m seeing a lot of comments about the benefits or drawbacks but it seems like it’s just subject to the immutable law of supply and demand.


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  2. […] unpaid internships offered by for-profit employers are illegal, a Labor official tells the New York Times. But the rules don’t apply to […]