Some Businesses Exploiting Unpaid Interns

Compiled By Yaffa Klugerman
December 15, 2009

While many college students are anxious to secure internships to help them land jobs, some employers are reportedly illegally hiring unpaid interns to do the work of paid employees.

KYW Newsradio 1060 in Philadelphia reports that according to George Ference of the Labor Department, the law stipulates six criteria for internships, including working for college credit and not taking the place of a paid employee. Internships which don't meet all six criteria are required by law to pay the minimum wage of $7.25 an hour.

Ference said that the Labor Department will investigate complaints from anyone who feels an internship is in violation of the law. But Jonathan Walters, a labor attorney, told KYW that young people are eager for any type of work in such a difficult economy and typically won't complain.

"They don't want to irritate potential employers," he said. "It's a problem to get people to say, wait a minute, I really was exploited."

Career counselors typically regard internships as a way to get a foot in the door for an eventual job. "I think internships are still very important, maybe more now than ever before," said Tonya Britton, workforce program manager for the business and social sciences division at Lone Star College-Montgomery in Texas, who was interviewed by

Because internships are so desirable, competition can be fierce. "The importance of an internship has changed from what parents experienced," said Steve Rodems, senior partner at Fast Track Internships, who was quoted by The New York Times. "It's no longer a nice-to-have addition to your resume. Upon graduation, more and more companies are looking for graduates who also have some real-world internship experience."

Indeed, Bloomberg reports that even though Goldman Sachs Group Inc. recently hired 600 fewer entry-level employees this year, about 90 percent of the new hires were former interns at the firm. Similarly, the accounting firm KPMG LLP hired almost 900 less entry-level employees this year, but 91 percent of the full-time hires had worked as interns.

But as more companies rely on internships for cheap labor, complaints about exploitation may very well increase. A recent court ruling in England may provide a glimpse of what might soon be in store for the United States: The Tribune reports that after Nicola Vetta took an unpaid internship at London Dreams Motion Pictures in the summer of 2008, the company refused to pay her expenses--a stipulation they had agreed to when she was hired. Taking the advice of her trade union, she took the company to court, arguing that she was entitled to be paid the minimum wage for her work, even though the agreement had only been to cover her expenses. Vetta won the case.

"[It was] wrong for employers to exploit the aspirations of young people as a source of zero-cost labor," Vetta was quoted as saying in The Tribune.

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