Education

Managers should rethink plans to use interns

Recent lawsuits filed by interns at for-profit companies mean the Labor Department might renew its focus on regulations behind using interns.

If you think the use of unpaid interns is just a socially acceptable version of indentured servitude, you might want to check your facts (and your ethics). While the definition of what constitutes an intern vs. paid employee has not always been clear, it seems that the Department of Labor might start clamping down on corporations that cross the line.

Recent cases in big media companies (one against Hearst Corporation, one against Fox Searchlight Pictures) have brought new attention to the use of interns in for-profit companies. In other words, you can't just bring in an intern because you need someone to take care of the crap work but can't afford a new hire.

The Labor Department has a fact sheet that better defines internship programs under the Fair Labor Standards Act. It says in part:

The Supreme Court has held that the term "suffer or permit to work" cannot be interpreted so as to make a person whose work serves only his or her own interest an employee of another who provides aid or instruction. This may apply to interns who receive training for their own educational benefit if the training meets certain criteria. The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances of each such program.

The following six criteria must be applied when making the determination:

  1. 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;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all the factors listed above are met, an employment relationship does not exist under the FLSA.

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

4 comments
io_zen
io_zen

you can either take a short-term approach, train interns a little, in exchange for their help with day to day operations, or take long-term approach of growing them into productive and motivated full employees of the company. Currently most companies would go for the short-term approach

macmanjim
macmanjim

It's a reflection of our ethics that companies would try to get work out of someone for nothing. It's not that they can't afford it, it's that they won't pay it. Just as some companies use illegal labor as a way to cut costs, this is just another way. It's cheap, niggardly and parsimonious as well as unethical not to pay someone for their time in capital.

jdemersseman
jdemersseman

As an IT director I would be happy to take on unpaid interns as I feel very strongly that we satisfy all six of the criteria. Having been forced by our HR team to offer paid internships in 2010-2011, I have canceled them simply because of the drain that they create for my salaried staff. While it seems to me that these employers were taking advantage of interns and not meeting the criteria, I am concerned that if the DOL pushes this too hard it will have a chilling effect on internships, particularly in technical fields. Here is my analysis of the three interns (A, B, and C) who worked for us from June 2010 to July 2011 related to the six point test. Intern A, a college-bound HS grad, only worked for us for two months during the summer. Interns B & C started in September and carried on with us through July and May respectively. Initially, the program was only slated for a semester, but we retained them because they were being paid and wanted more experience. 1) Intern B feels very strongly that the experience he gained here was of greater value than a class. November to January I conducted a CCNA training class with two salaried staff and interns B and C in which we spent a three 20-30 minute sessions a week studying networking fundamentals. Additionally, it would have been relatively simple to use existing Work Instructions as training materials. Where work-instructions were lacking, our internal knowledge base system could have served as a tutorial. Finally, one-on-one coaching is going to occur everyday because it would be an unreasonable expectation that an intern is going to know how to do these things out of the gate. 2) It would be impossible to argue that B and C did not benefited from their training, perhaps you could say this for A, but that is a function of the brevity of time he worked for us (2 months) and the fact that he was not seeking work afterward. (He went on to major top five US University.) We trained B and C in myriad aspects of computer support every single day. C came to us completely green, every bit of the knowledge he is using in his new job (May 2011) he gained here, which I???m glad for. B received ten months of experience to add to his resume, which were vital to the job he started in July 2011. 3) This is true. 4) There was a good 4 to 8 week lag between the time A, B, and C started and the point at which they became valuable, so I can absolutely attest that we did not gain immediate advantage, to the contrary. Honestly, our even at the end of their internships, salaried staff work was still getting impeded so they could be trained at regular intervals despite the fact that we were paying. 5) This is true. 6) Also true. I would be happy to offer credit to their institutions, but I cannot afford to train and pay them. That???s the worst of both worlds for me and completely removes any incentive for me to offer internships at all. For me it is a quid pro quo. Yes, I am going to have some scutwork for interns to do, for example tearing down the boxes of all the computers that just came in, but that's a real part of IT work that I have done at multiple employers. However, as I said above, it's not all mundane stuff and real training will occur that will give them experience to get a good job when they walk out the door. However, if DoL is going to put a gun to my head, making it extremely hard to fulfill these criteria, so that my HR department is unwilling to consider unpaid internships, then my response will be to forget internships and spend additional funds for experienced employees because the staff time lost to training a paid intern is simply not good economics.

deICERAY
deICERAY

Not a big difference between no wage and minimum wage these days. Subservience is one of mankind's most enduring abilities.