• August 21, 2014

U.S. Labor Department Releases New Rules for 'Educational' Internships

Amid increasing national attention to unpaid internships, the U.S. Department of Labor released a statement on Wednesday that clarifies employers' and colleges' roles under federal law.

The document applies a six-part test from the Fair Labor Standards Act, which derives from a 1947 Supreme Court decision involving railroad-company trainees, to modern-day interns in the for-profit sector. For interns to work for private companies without compensation, the Labor Department says, their positions must meet six criteria.

First, "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."

Interpretations have differed over the wording in federal labor regulations of that requirement, which says "vocational school" instead of the new "educational environment." Many employers have insisted that students receive academic credit for unpaid internships, in part to try to show compliance with legal standards. And colleges have developed a range of approaches to the credit question, offering internship-based courses, independent studies, or no-credit transcript notations to satisfy employers without altering academic philosophies or making students pay tuition to work free.

The Labor Department's statement further clarifies the "educational environment" test by noting, "the more an internship program is structured around a classroom or academic experience as opposed to the employer's actual operations, the more likely the internship will be viewed as an extension of the individual's educational experience."

"This often occurs," the statement says, "where a college or university exercises oversight over the internship program and provides educational credit."

Other conditions must also be met for unpaid internships at for-profit companies to be legal, the Labor Department says:

  • The internship is for the benefit of the intern.
  • The intern works under close staff supervision and does not displace regular employees.
  • The employer derives no immediate advantage from and may in fact be impeded by the intern.
  • The intern is not necessarily entitled to a job after the internship.
  • The employer and the intern understand that the intern is not entitled to wages.

Faculty and staff members who supervise internships for students across the country agree that some employers see interns as free labor.

"There have been businesses that have taken advantage of students," said Michael True, director of the Internship Center at Messiah College, who runs a national e-mail list on internship issues.

But campus officials, awaiting the Labor Department's guidance, had also expressed concern that new rules might scare off good-faith employers offering quality internships. Mr. True worried that "employers would just pull in the carpet and say, 'I'm sorry, we're not going to offer those,'" he said. "'This is just too big a risk for us.'"

Still, well-structured if unpaid internships that bear academic credit can be legal, even in the private sector, said Janet Nepkie, a professor of music and music industry at the State University of New York at Oneonta. Ms. Nepkie oversees the internship program for her department, in which students keep daily logs, and she visits their work sites, discussing the interns' duties with supervisors there.

When colleges and employers work together, internships can be valuable educational experiences, she said. "I can offer assurance to companies that we will be able to show compliance," she said. "We have a partnership here."

The Labor Department plans to continue reviewing the need for additional guidance on internships, also in the public and nonprofit sectors.

Comments

1. jesor - April 21, 2010 at 07:52 pm

For all of this good effort, the reality of it is, what student in their right mind would start off a career with a FLSA lawsuit against their internship provider. Regardless of what the law says about retribution, that information gets around. Aside from off the record chatter between former and prospective supervisor, A simple google search would result in finding out that the student is a plaintiff in a case, and when conducted in the back room of a HR office, it would be impossible to prove. It's the same reason why discrimination cases are so hard to prove.

2. sarannart6 - April 21, 2010 at 10:47 pm


The Department of Labor's Guidelines on this are available at: http://wdr.doleta.gov/directives/attach/TEGL/TEGL12-09acc.pdf.

The policy question -- whether the FLSA should be rewritten to permit unpaid internships in a broad range of circumstances is a separate issue from the compliance question.

There is a law called the Fair Labor Standards Act which requires employers to pay a minimum wage to people who do work for them. We don't get to pick which laws we want to comply with and which laws we want to ignore.

However, as poster #1 notes, interns are not in a good position to enforce the law through the process of filing a FLSA complaint.

Colleges and universities, on the other hand, are in a position to engage in a multi-lateral effort to insure their students are paid in those situations where federal law mandates payment.

3. fallen_angel - April 22, 2010 at 10:44 am

@usc158: Your logic is faulty. Not exactly surprising for someone who uses the word "pinheads" four times in a single post. If there are fewer internships, there will be fewer jobs that can be contingent on having completed an internship. This would mean that the fact that there are fewer internships would not lead to the cataostrophic outcomes you predict. People without internships would not necessarily be shut out of the labor force, because companies would be forced to select from among those who haven't had internships due to the limited availability of those who had.

There may be downsides to the new regulations - their unenforceability chief among them - but this is not one of them.

Incidentally, to argue that 20 hours of work at $5.50 an hour is "better" than 0 hours of work at $7.75 an hour in a post in which you tout the joys of unpaid internship is bizarre. Granted, the immediate financial returns are better in the first scenario, but immediate financial returns aren't the only metric by which job opportunities are or should be assessed. Case in point: the unpaid internship.

4. optimysticynic - April 23, 2010 at 08:53 am

Why assume these moves are to protect students? Motives are rarely what people claim they are. This is more likely at least partially motivated by the desire to protect the jobs of minimally-skilled workers who might be displaced by interns.

5. pat_sachin - May 07, 2010 at 06:20 am

The statement clarifying employers' and colleges' roles under federal law applies a six-part test from the Fair Labor Standards Act, which derives from a 1947 Supreme Court decision involving railroad-company trainees, to modern-day interns in the for-profit sector.
http://www.financeandmarkets.net

6. musicindustryinsider - May 13, 2010 at 10:11 pm

I have worked in the Music Industry at both independent and major labels for 18 years before teaching at a State University.

Students who have site visits and prepare weekly reports for their intern advisors are not receiving any advantage from their academic intern advisor.

An internship is not a vocational training guarantee for anyone, and if a student, believes they are going to be handed the keys to someone's editing studio, in which a post production company is billing $250.00 and up an hour to blue chip clients, then you have been greatly misinformed.

If you are preparing your students to understand that other peoples time and money is precious, then you are beginning to set them in the right direction. The music industry is an animal all its own, that requires great sophistication in understanding the people, psychology, money, money, money, and money.

There are more people who want to work in music but don't think they need to learn the grunt work. Most of the jobs in the music business are created by self starters. Being able to pull staples out of paper for Clive Davis, and be priveledge to over hear his conversations will do you more good than anything else you could find.

If you begin to place any condition on what an internship is---then companies will likely find their own interns from the general employment pool. Remember, they don't need your students (they need anyone willing to do what they need).

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