Summer intern or unpaid employee?

By Anne Fisher, contributor


FORTUNE -- Dear Annie: Can you explain something to me? I'm a film major at UCLA, graduating in 2011. A friend of mine, who graduated from my school last year, recently told me he was quitting a job as a production assistant at a TV studio. I know I could do what he was doing, it was a nonunion job, and it would be fantastic experience for me. So when I heard he had given two weeks' notice, I made an appointment with his boss and offered to fill in for the summer, as an intern, for no pay.

I live with my parents and don't need money, but I do need this kind of job on my resume. My friend's boss turned me down, saying that the person they hire for the job will have to be paid to do it. Why would an employer turn down free help? It doesn't make sense to me, and my friend, whom I asked about it, doesn't get it either. Maybe because I'd be leaving in the fall and they'd have to train someone all over again? Or can you think of some other reason? -- Weirded Out in Westwood

Dear W.O.W.: Yes, I can think of some other reason. It's a little thing called the Fair Labor Standards Act, a federal law that decrees, among other things, that employers must pay a minimum wage to hourly workers, and must pay them overtime if they work over 40 hours a week.

Internships are exempt from the law, but only if they stick to certain guidelines. Just a few weeks ago, the U.S. Department of Labor put out a new set of regulations designed to remind employers of the legal difference between interns and regular employees who just aren't getting paid -- and, incidentally, to put employers on notice that DOL plans to enforce the rules a little more stringently this summer than in past years.

Why now? "The recession has caused companies to put the brakes on costs, and lots of students and new grads are having trouble finding jobs," notes Joel Rice, a partner in the Chicago office of Fisher & Phillips (no relation to yours truly). "That combination of circumstances means that some companies may be tempted to push the envelope when it comes to defining the word 'internship.' "

"Hiring people and not paying them because they are 'interns' has sometimes flown under the radar in the past, because young people looking for work experience may not know their legal rights or, even if they do, they're hoping their internship will turn into a permanent job, so they don't complain," Rice adds.

Talkback: Were you ever an intern, paid or unpaid?

To discourage employers from taking advantage of that, the Labor Department has set 6 standards a position must meet in order to qualify as a legitimate unpaid internship. They are:

1. The internship, even though it involves doing actual work in a real business, must be similar to training you would get in "an educational environment." In other words, you should be treated as though your main task were simply learning -- because it is.

2. The experience should be "for the benefit of the intern," in the DOL's words, meaning that you should be doing things that add to your store of knowledge, in contrast to, say, functioning as a general errand runner and dogsbody.

3. Interns should not displace regular employees. In addition, they should work under close supervision by regular paid staff members.

4. The intern's employer should derive no immediate benefit from an intern's activities, says the DOL, "and on occasion its operations might be impeded." That is, you aren't there to contribute to the bottom line so, if you get in the way once in a while, that's okay, as long as you're learning something.

5. The intern is not necessarily entitled to a paying job at the end of the internship.

6. The employer and the intern both understand at the outset that this is an educational experience and the intern won't be paid.

So, while you may be right that your friend's boss (or former boss, by now) might simply be reluctant to take on someone who'll only be around for three months, it's also possible that the production-assistant job doesn't meet the standard for an internship without pay. Perhaps he or she is aware that, as Joel Rice puts it, "legally, an employer can't exploit you even if you ask them to."

While we're on the subject of internships, a few words about the ones that do come with a paycheck: The National Association of Colleges and Employers surveys member employers annually to find out how much they plan to pay interns. This year, pay for bachelor's degree students will average $17 per hour, down just a little from last year's $17.13. The highest-paid interns are those majoring in actuarial science ($20.26), math ($19.02), statistics ($19.02), engineering ($18.31), and computer science ($18.20). Those numbers should warm the hearts of the folks at the Department of Labor: That $17 average is well above the $7.25 federal minimum wage.

Talkback: Were you ever an intern, paid or unpaid? What did you get out of the experience? Tell us on Facebook, below. To top of page

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