While there are lots of reasons that a person might agree to work for no money, they can be grouped into two big categories we will call the Noble and the Hopeful. The Noble are your classic volunteers—they intern at the ACLU, UNICEF, or political campaigns—and they want to make the world a better place. Since they don’t have any money they donate themselves. On the other hand, the Hopeful want jobs—they intern for prestigious and often quite wealthy corporations, taking internships in the hope these will turn into real, paying jobs (or at least into resume lines that will help them
get paying jobs). Many, if not most, of the people in both groups are
college graduates.
Noble interns are automatically exempt from federal minimum wage laws. Hopeful interns, on the other hand must be paid at least minimum wage unless their internship meets the following
criteria:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- 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;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
A cursory glance at this list should make it clear that it is more aspirational than a real reflection of the typical unpaid internship. Under these guidelines any intern left to copy files, get coffee, or perform any of a hundred other routine clerical procedures would presumably be providing an advantage to the employer and thus entitled to minimum wage. In spite of this, lawsuits against those employing unpaid interns are still rare enough to be
big news. This probably represents a sensible terror on the part of the hopefuls that they will alienate the very people they hope will give them jobs. Hopefuls take unpaid internships in the first place because, in the present job market, they lack the bargaining power to demand paying work.
With that in mind, consider the preamble to a bill signed during another period of economic hardship—the
Fair Labor Standards act of 1938 (FLSA), which gave us the minimum wage:
The Congress finds that the existence, in industries engaged in commerce or in the production of goods for commerce, of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers (1) causes commerce and the channels and instrumentalities of commerce to be used to spread and perpetuate such labor conditions among the workers of the several States; (2) burdens commerce and the free flow of goods in commerce; (3) constitutes an unfair method of competition in commerce.
The FLSA does not seem like it would have an exception for the modern intern. On the contrary, the unpaid intern seems to be exactly what the Act was designed to protect from. There is no express exemption for unpaid interns anywhere in the act. The six criteria above come from the 1945 Supreme Court Case,
Walling vs. Portland Terminal, that is generally cited as the genesis of the unpaid intern exemption. However, a close look at the case reveals that it does not deal very precisely with the modern intern’s situation. The following language from the opinion is quite telling:
Many persons suffer from such physical handicaps, and many others have so little experience in particular vocations that they are unable to get and hold jobs at standard wages. Consequently, to impose a minimum wage as to them might deprive them of all opportunity to secure work, thereby defeating one of the Act’s purposes, which was to increase opportunities for gainful employment.
Bear in mind, in the modern age we are largely talking about college graduates.
So, the question becomes: is the Hopeful intern more like the rule of the FLSA, or the exception in
Walling? Is a motivated and educated young person more akin to the normal worker of 1938, poorly treated because of the gross oversupply of workers, or is the Hopeful intern more like the totally unemployable trainee who warrants exception? If the answer is the former, than unpaid internships are illegal.
Sound off in the comments.
