Unpaid internships under investigation

Some interns are to be considered employees under the Fair Labor Standards Act.

Katherine Lymn

University of Minnesota students who must choose between a paid job and an unpaid internship may soon see the best of both worlds. The U.S. Department of Labor has been investigating companies that do not fairly compensate interns. Labor Department solicitor M. Patricia Smith has brought her investigation from New York state firms to a national initiative of enforcement. Unless they fall into outlined criteria, interns are to be considered employees under the Fair Labor Standards Act and are entitled to minimum wage and overtime. The Department released a report Wednesday aimed at helping companies determine proper compensation for interns. Many of the criteria, which were already existing laws, center on benefits for the intern versus benefits for the employee. If the internâÄôs experience is for the internâÄôs own benefit, and the internship is carried out in a way similar to how it would be in an educational environment, the position is more likely to be unpaid. University student Rachel SabelkoâÄôs experience exemplifies this philosophy. The public relations junior currently works in marketing pay-free for a nonprofit. Since her position is unpaid, Sabelko maintains a paid part-time job with the College of Liberal Arts Career Services. She admits she would work fewer hours for pay at her part-time job if the internship was compensated. âÄúItâÄôll pay off when I get that one job,âÄù she said. Antonio Lizano of Marco Polo Advertising, a company that often hires University students as interns, said the company used to pay interns but recently switched to a for-credit model. When Marco Polo interns were paid, they performed poorly, he said. The credit model âÄúcreates a level of comfort on [the internsâÄô] side, and theyâÄôre willing to perform on a level they need to,âÄù he said. âÄúWe realized that âĦ giving [interns] actual projects that they can claim as theirs for future positions is much more rewarding,âÄù Lizano said. CLACS Director Paul Timmins agreed. âÄúA higher-paid experience where a student is doing less substantial work might not necessarily be better,âÄù he said. âÄúThe student also needs to be paying attention to âĦ collecting experience that is relevant [to a future career],âÄù he said. Unpaid positions can have some advantages over paid internships, said Sabelko, who has worked with students to find internships with her job as a peer adviser at CLACS. The unpaid positions can be generally better experiences because supervisors are often more flexible with hours and responsibilities because they arenâÄôt providing compensation, Sabelko said. The road to obtaining an unpaid internship is much less cutthroat and competitive, Sabelko added. According to the Department of Labor, the training the intern receives cannot directly benefit the employing company. Also, an intern who does not replace existing staff but rather works under close supervision of them is not an employee and is therefore unpaid. These criteria, including the understanding between the employer and intern that the work is unpaid, must be met for the internship to be fairly unpaid. The FLSA also requires that if an intern is placed with a company for a âÄútrial periodâÄù before being hired, the intern is technically an employee from the first day on the job. âÄúThatâÄôs not fair,âÄù Lizano said. Marco Polo Advertising hires performing interns after a two-month trial period. âÄúYou donâÄôt know what to expect when you have an individual,âÄù he said. âÄúSometimes a person does not have a skill and you have to teach them.âÄù Lizano considers the training of an intern an âÄúexpenditure.âÄù Of all the schools that provide interns for Marco Polo, the University likely has the highest rate of hire at about 40 percent, he said. Timmins said his office is tracking the national conversation on the topic. The center encourages students to holistically assess a potential internship, including âÄúunderstanding what kind of compensation is involvedâÄù before starting a position, Timmins said. âÄúThere are all sorts of different issues involvedâÄù with the broad spectrum of nonprofit, for-profit and governmental companies that hire interns, he said. Career Services counselor Robin Stubblefield said that in her experience, nonprofits tend to pay interns nothing, whereas for-profit companies are more willing to pay. The bottom line is knowing upfront how and what the intern will be paid, Timmins said. Sabelko said the students who care more about getting paid at internships are those who circumstantially need the money. When students need to make money during the school year, they are likelier to take more hours at their paying job than seek an internship, she said. CLA offers students in this predicament a possible solution. The $1,200 CLA Undergraduate Internship Grant allows working students to cut back on hours or otherwise adjust their schedule so they can take unpaid internships and still float financially, Stubblefield said.