Intern or Free Labor? FLSA Act is Rocking the Boat!

• Are students afraid to rock the boat and     complain about their internship employers?

• Are unpaid, internships legal? (Wait a minute - I wasn't paid!)
• How will the new, FLSA laws impact hiring?

As a University Career Counselor, one of my specialties is the College to Career Transition. Many of my students take on internships to gain valuable experience and transition to a new industry. During this recession, there has been an increase in  internships. Also, more employers are asking schools to post unpaid internships on school job-boards. Are they legit? Many schools are concerned that the recruitment pipeline will dry up, if employers are forced to pay wages for internships.

On a regular basis, we grapple with defining internships and the potential, implications of unpaid internships. Should Universities post these jobs on the school job-boards? Should a University Career Center screen or evaluate postings? Whose role is it to to protect students from opportunists?


Most Liberal Arts students are not paid for internships, though they receive academic credit. As a  Graduate student in a Psychology Masters' program, I completed an 8 month internship with the Canadian Federal Government. My role was that of an Outpatient, Addictions Counselor and this internship was required by my school. I received supervision by PhD level professors at my school and trained clinicials at my internship. Within 5 weeks of beginning the internship I was meeting with individual clients! In Psychology, you are not legally allowed to be paid for internships. I had to buy Medical Liability Malpractice Insurance, Workers Compensation Insurance, and pay for my academic credit and supervison. I worked three part time jobs  - to pay for my unpaid internship! My internship was excellent and it helped me secure my first, professional, job.

Recently, the U.S. Department of Labor (DOL) passed legislation which could have a major impact on interns from all majors. The FLSA or Fair Labor Standards Act is already creating quite a buzz on HR groups. NACE (National Association of Colleges and Employers) deemed this of such critical importance that they held a roundtable and conducted a member survey during their annual conference.  The new FLSA guidelines are defining what constitutes an internship and addressing the thorny issue of intern compensation. According to the Department of Labor few for-profit employers can offer unpaid internships and remain in compliance with the FLSA.  Check out the DOL’s new Fact Sheet for Employers. The DOL has devised a test to determine if you are in an internship or an employment relationship (regular job). If you are in an employment relationship – you must be paid according to State and Federal wage standards.

6 criteria to access the employer/intern relationship
* 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 or vocational environment;
* The internship experience is for the benefit of the intern;
* The intern does not displace regular employees but instead works under close supervision of existing staff;
* The employer providing 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;
* The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship. The primary exceptions to the FLSA are for people who volunteer at a state or local government agency, a or a non-profit agency.

Having coached thousands of college students over the years, worked with countless internship employers and personally having supervised many interns - I'd like to weigh in on this issue. An intern should receive training, mentoring and work experience. Interns cannot simply be a source of free labor during an economic downturn. Ideally, an intern would receive supervison at work and at school. Also paid internships would compensate students for the time expended. However, the internship ideal is not the prevailing reality in the recruitment industry. The entire issue of internships is very complex and multi-facted. The discussion must address more than just compensation. It must examine the core of the intern experience, the level of supervision and the challenges inherent in granting academic credit for external activities.

I'd love to hear my readers' opinions and comments.  What do you think? What have you gained from your internship?

Check out my related posts on Career Counseling & Career Testing
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Author: © 2010 - All Rights Reserved - Sharon B. Cohen, MA, Counseling Psychology, CPRP.

Licensed Counselor. Career Counselor and Career Transition Specialist. "Virtual Career Counseling: helping business professionals, reach their career potential!"

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