Intern Unrest

Regulators are slowly pushing back against unpaid internships



Behind her big wooden desk, bathed in green light reflecting off a rhododendron outside her window, Joy Soll tells business after business that what they want is illegal.

"Many employers — if they can get away with it — will try to get unpaid interns," she said. Soll is the internship coordinator for Humboldt State University's Career Center, overseeing the university's non-academic internship listings. She is the person who recruits businesses to offer internships, and who educates them about what's OK and what's not.

Though federal and state regulators have been pushing to stop the practice, Soll said she still gets calls from interested businesses thinking "maybe I can get these excited students to do my work for me" — for nothing.

Soll, who started at the career center in 2011, said she was "genteel" with those people at first — but now she tells them without hesitation that what they're looking for is illegal. And most of the time, at least with local businesses, she can convince them to hire a paid intern. After all, most student interns only work six, 10, 20 hours a week — usually for minimum wage.

It's larger, non-local companies that decide against listing paid internships — companies used to the old ways, Soll said. "They've been doing it for years."

Balancing on a large rubber ball in lieu of a chair, Soll talked exuberantly about her work and about Springboard, the online job database she manages.

She sifted through Springboard posts pending approval until she found one submitted by Warner Music Group. The "major music company" — as it's described on its website – had posted an ad offering 300 unpaid internships. That's illegal, at first glance. But at the bottom of the post, a technicality: "Must receive college credit."

"They're making sure they're in compliance, but they're getting around paying their students," Soll said. "That's ridiculous. They probably have tons of money."

Soll — who approves each listing before it can go on Springboard — said with posts like that, the burden of qualifying for college credit is on the student. "It's not illegal — it's a loophole," she said. "I think it's inexcusable. I probably won't post this."

It's against the law to use unpaid laborers in the United States. But by all accounts, the practice of hiring unpaid interns — often eager college kids — has grown immensely in the last 20 years.

A National Association of Colleges and Employers poll from 2012 shows that 55 percent of graduating college seniors held internships — hundreds of thousands of young women and men nationwide. That's up from 17 percent of students who held internships in 1992, according to a study reported in the New York Times. But federal and state regulators aren't doing much to ensure that interns get either a heavy dose of learning or a paycheck in exchange for their labor, prompting journalists at the nonprofit ProPublica to put out a nationwide call asking students about their internship experiences (see sidebar, page 14).

There have been a few newsmaking violations, many concentrated around the media industry. The production company behind the Charlie Rose Show settled a lawsuit out of court late last year after agreeing to pay 189 former interns up to $250,000 in back wages. Another suit filed against the Hearst Corp. by a former Harper's Bazaar intern was recently tossed out of class-action status by a judge.

Back in 2010, some government internships had become so coveted that interns were paying companies in Washington, D.C., thousands of dollars for guaranteed positions, the Washington Post reported.

Federal guidelines detail when a company is allowed to have an unpaid intern. The gist is simple: An internship is not a job; it must benefit the intern, not the business; and it can't displace paid workers.

But in a time of high unemployment, employers continue to seek free labor while potential employees — including HSU students — are being told internships are a crucial step in landing a job.

In California, the state doesn't have the money or the tools to enforce the labor laws that define unpaid internships, according to a state regulator. David Balter, staff counsel for Division of Labor Standards Enforcement, said he couldn't even estimate how many unpaid internships his department investigates.

"I think there's a l ot of it going on," he said. His agency gets around 50,000 complaints a year about unpaid or underpaid wages, he estimates, but the state has no system to differentiate unpaid internships from other wage disputes.

"We don't keep statistics — unfortunately," Balter said. "Controlling the numbers and seeing what's going on would be very useful."

Balter recalled a pair of notable cases from the last several years. Oddball Film and Video, an archival footage company based in San Francisco, was cited for nearly $250,000 in fines in December for using interns who should have been getting paid. The company has appealed the citation and no settlement has been reached so far.

In 2010, French Laundry — an upscale restaurant in Napa County that regularly makes best-of restaurant lists worldwide — was dinged with a $58,000 citation for failing to itemize and pay wages to interns it put to work in its kitchen. Based on the work the interns were doing, they should have been classified as employees, Balter said.

"Obviously we're trying to fix the situation when we find one, where people are not being paid minimum wage when they're entitled to it," Balter said. "There are situations where it's perfectly proper to utilize an unpaid intern — it's supposed to be a situation where someone's getting an exposure and an experience with a lot of supervision and mentoring. That requires a lot of time and it can actually be draining on the resources of an employer. It shouldn't be a cost benefit to an employer."

Toiling as an intern without pay is only allowed if a student earns college credit. Campuses in the California State University system have internship programs to help students get credit, and some university departments have a staff member dedicated to coordinating internships.

At HSU, about 200 students took part in academic internships this spring, according to Annie Bolick-Floss, the director of HSU's Center for Service Learning and Academic Internships. Many of those internships are tied to service learning classes — common in the psychology, business and education departments — that require internship hours in addition to the normal course load. Students receive credit with the approval of a teacher or department.

"'Internships' is this huge word that covers a vast array of experiences," Bolick-Floss said.

And while it's legal to have students work solely for credit (and the experience), not all for-credit internships are unpaid. Some of those 200 internships came with scholarships or offered an end-of-the-semester stipend, Bolick-Floss said, although she wasn't sure how many. They're still legally considered unpaid if the intern is not earning an hourly minimum wage.

HSU's school of business arranges unpaid internships for qualified juniors and seniors and pays them $2,500 at the end of the program — if they are successful. That money comes from a Smullin Foundation grant.

Others frown on payment. Bolick-Floss said the national agency that accredits HSU's school of social work doesn't allow paid internships for credit, so the department only arranges unpaid internships.

After businesses demonstrate their workplaces are safe and agree to carry general liability, the university works with them to ensure the experience is educational — "so a student's not counting paperclips," she said.

HSU is one of many schools trying to convince students to find internships early and often. The post-college job search is more competitive than ever, and Joy Soll says students are catching on.

"We have a lot of students who are hard workers who want to learn and want work experience," she said. Students are realizing that a college degree often isn't enough to compete for a dream job anymore.

And students keep on lining up for opportunities.

HSU juniors Anna Rhoads and Rachael Londer both wrapped up unpaid internships this semester with PowerSave Green Campus, an energy awareness nonprofit that operates on campuses around the U.S.

Both earned college credit for the internship, and both juggled the internships and part time jobs with full time schoolwork. For Rhoads — who gets some financial support from her parents — it wasn't an easy balance.

"I felt like I wasn't able to put a lot of effort into my internship," she said.

Still, the work was rewarding and confirmed that she wanted to continue doing outreach, she said, so she didn't mind going unpaid.

Londer, an environmental policy junior, enjoyed the work but had frustrations with the internship.

"It was an interesting experience because there are five other team members and they all got paid — except me and Anna," Londer said. "And we essentially did a similar job. You have to pay your dues. After two semesters of unpaid work you build that relationship. I thought it was the necessary requirement to get hired, even though it didn't seem fair to me."

PowerSave Project Manager Ellie Kim said the organization's unpaid interns really aren't doing the same work as the paid interns. They avoid a host of managerial duties that paid interns have to deal with, she said, and PowerSave is aware that for-credit interns are essentially volunteering their time.

"In terms of the workload we don't have the same expectations," she said. "The for-credit internships are just opportunities. It's not like we're looking to get free labor."

PowerSave has funding to support one 40-hour-a-week position at each campus it serves, which is usually split among four to six students.

Because demand was so high for the paid internships, PowerSave designed the program so students could earn credit working with the limited number of paid interns on sustainability projects.

Plus, Kim said, there's an application and hiring process for the paid position, so the best applicant gets the job.

For Londer, putting in the time paid off. She made the cut to be one of PowerSave's paid internships in the fall semester.

"Even if I didn't I would have probably continued working with them," she said. "I feel like they do a lot of good stuff."

While a paycheck is nice — and necessary, for some — for HSU graduate Olivia Cruz the right internship is more valuable than the income. Cruz, a 2011 HSU political science graduate, said her current unpaid internship is far more rewarding than a prior paid one.

She was excited for her first post-college internship at a nonprofit organization (which she declined to name) in Long Beach, Calif. — at $10 an hour.

"I think that coming out of college I was really idealistic — I wanted to work for a nonprofit. I expected something different from the paid internship and I didn't get it," Cruz said. Most of the two-month internship was spent doing mundane office work — partly because her supervisor was new to the nonprofit as well. Cruz wanted to hit the streets, canvassing or tabling for the environmental group.

Plus, the expectations were more, well, job-like. She couldn't exactly say no to an assigned task when she was earning a wage.

Now, Cruz is interning for a Long Beach city councilman while she prepares for law school, and she says she can pick and choose the type of work she does. She's had the opportunity to come up with talking points and attend legislative meetings — far better than entering data into spreadsheets.

Cruz said she'd rather toil for free where she's learning something than work at Starbucks, and she can afford that choice because she's living at home.

"I was just reading an article about how we're becoming a country of interns," Cruz said. "I've already done two, so I totally believe it."

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