How is this legal?

Big BuildingCredit: Victoria DeLone

How are unpaid internships legal? Now more than ever, college students are faced with the Experience Paradox; to get a job one must have experience, but to gain experience, one must first find a job. In order to prove to prospective employers that recent graduates are, in fact, capable human beings, they will take on an unpaid internship.  Students of the millennial generation are being pressured to find an internship (any internship) for the sole purpose of writing "has experience" on their resumes. Over the last five years a full or part-time internship has become an unspoken requirement if recent grads wish to gain entry-level jobs after college, but there are a lot of legal and ethical issues with this system. 

Big companies and small have been using desperate students as unpaid labor. Students have been asking themselves the same question for years: how is this legal? Only now are interns beginning to take abusive companies to court. Under federal law, every employee in the US is supposed to be entitled to a minimum wage. So why this loophole in the system? Are unpaid internships really legal? Are they even ethical? As it turns out, there was a supreme court case detailing this exact issue in the late 1940s.

What does the law say?

According to the Supreme Court case Walling v. Portland Terminal Co., [1] an internship is only legal if it passes the following 6 requirements:

  • the internship is similar to the 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
  • employers that train the interns cannot derive any immediate advantage from the activities of the intern; sometimes the intern may actually be an imposition to the company
  • the intern is not necessarily entitled to a job when the internship ends
  • both the intern and employer understand that the intern is not entitled to wages for the duration of the internship 

ChicagoCredit: Victoria DeLone

So what's the problem?

This ruling may be outdated. Now almost every new grad works at an internship, half of which are unpaid. Unfortunately today, these requirements, so neatly laid out in 1947, are not always met. These ill-defined, vague requirements allow employers to use free labor and then refuse to hire and pay loyal interns. The Department of Wage and Hour Division have stated that if interns at for-profit companies aren't being paid, it’s more than likely that at least one of the six requirements are being broken, meaning that the internship is illegal. There is controversy, especially in Washington and California, which claims that this ruling breaks multiple minimum wage laws.

What if you can't afford to be unpaid? This is another major issue with unpaid internships. They favor students who can afford to have no income for a summer, semester, or year. Students who come from less wealthy backgrounds may not be able to do an unpaid internship, and so pass up potential opportunities for experience, employment, and better quality of life. 

What does an illegal internship look like? [2]

  • Doing the same work as full time employees, but for free 
  • Doing only menial tasks, like cleaning and janitorial work, instead of actually learning and developing skills
  • Staying to do work after paid employees have left
  • A company is making monetary gains (or immediate advantage) from an unpaid intern

More and more interns are filing law suits claiming that they were not being taught, but made to do menial tasks instead of the educational internship experience which was promised. 

It’s great to get experience, but when students are being abused and manipulated as unpaid labor, experience is not what employers are providing. If you have found yourself doing this kind of internship just know that you have a right to an educational experience. You are more than free labor.