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Unpaid internships to gain skills, edge

Unpaid interns cannot be used as free labor. That federal law has been on the books for decades. But with the economy continuing to sputter and employers looking to cut corners, conditions are ripe for abuse. • To that end, the U.S. Department of Labor recently placed renewed emphasis on the Fair Labor Standards Act's rules as they apply to internships. • The federal agency wants for-profit companies to know that they have to meet strict criteria when bringing on interns and not paying them.

"Voluntary internships are often positive and career-building experiences," said Dolline Hatchett of the Labor Department's Wage and Hour Division. "But there are some clear rules for what is legal . . . and what is defined as an unpaid internship."

Among those criteria are the internship should be similar to training given in a vocational school or academic institution, that the intern does not displace paid workers and that the employer "derives no immediate advantage" from the intern's activities.

Also, the internship must be for the intern's benefit, the intern is not guaranteed a job, and both the employer and the intern understand that the intern is not entitled to wages.

As a not-so-subtle reminder to businesses and industries, the Wage and Hour Division posted the criteria on its website in April, when many students usually start to look for summer internships, Hatchett said.

"It also made sense because questions about unpaid opportunities come up during tough economic times," she added.

In a recent interview with the New York Times, Wage and Hour Division deputy administrator Nancy J. Leppink said, "If you're a for-profit employer or you want to pursue an internship with a for-profit employer, there aren't going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law."

Fine line

Dennis Nolan, a retired labor law professor from the University of South Carolina, said the austere economy can be a breeding ground for employers to skirt the law.

"As entry-level jobs dry up, students and recent graduates are desperate to find something else," Nolan said. "An employer says, 'Work for us as an intern, and you will gain some skills.' That may be good for those people, but the end result is the same. Posting a different label on a person's forehead is a simple way to avoid the Fair Labor Standards Act."

Hatchett said the Labor Department has not received any complaints, but it will investigate them if it does. Those found in violation of the law could be ordered to pay back wages or damages, she said.

But coming forward with a complaint has its own perils. Interns who think they have been wronged are probably reluctant for fear of being labeled a troublemaker early in their careers, Nolan said.

"If you filed a complaint, there are prohibitions against retaliation, but your chances of getting a job (with that company) have gone down the tube," he said.

Nolan said interns look at unpaid work with a company as a way of getting their foot in the door and gaining experience.

Holland Williams, director of career development at the College of Charleston, where just over 600 students become interns each year, said there is a growing trend among businesses to offer unpaid internships.

"Some were using them as part-time employees but framing it as an internship," she said. "An intern cannot replace employees. The company has to offer an educational experience in a professional setting. The intern is not turned loose to do his own thing."

Criteria for unpaid interns:

• 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 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; on occasion its operations may be impeded.

• The intern is not necessarily entitled to a job at the conclusion of the internship.

• The employer and the intern understand the intern is not entitled to wages for time spent in internship.

For information, complaints:

Call toll-free 1-866-487-9243 or go to dol.gov/whd or www.dol.gov/whd/regs/compliance/whdfs71.pdf.

Criteria for unpaid interns:

• 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 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; on occasion its operations may be impeded.

• The intern is not necessarily entitled to a job at the conclusion of the internship.

• The employer and the intern understand the intern is not entitled to wages for time spent in internship.

For information, complaints:

Call toll-free 1-866-487-9243 or go to dol.gov/whd | www.dol.gov/whd/regs/compliance/whdfs71.pdf

Unpaid internships to gain skills, edge 10/16/10 [Last modified: Friday, October 15, 2010 9:58pm]
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