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Your Unpaid Internship Might Be Illegal. Here’s How to Find Out

June 13, 2016
by Dana Sitar
Staff Writer
Unpaid internships

My writing career started with an unpaid internship for which I’ll be forever grateful.

It gave me published clips, blogging experience, direct access to a Silicon Valley startup founder and the tools to become an expert in a topic I knew nothing about.

Also, it was probably illegal.

Browse job postings anywhere when you’re trying to break into an industry, and you’ll probably see plenty of opportunities that offer no money but pay in “experience” and are called internships.

Experience is indeed valuable, but you might actually be legally entitled to real money for the work you’re doing.

Plenty of unpaid internships are legitimate educational opportunities that help you fulfill college requirements and learn valuable skills in your industry.

But some are complete baloney that lure newcomers into working for free under the premise it’s the best way to gain experience, network and pay your dues.

And it might be difficult to tell the difference between the two.

So we’ve pulled together a summary of the rules that govern internships, how to tell whether yours is legal and what to do if it’s not.

Internship Laws

Whether an internship can be unpaid depends on whether the work you do falls under the government’s definition of employment, as explained in the Fair Labor Standards Act (FLSA).

These guidelines apply to work in the private for-profit sector, not to internships in the public sector or for nonprofit charitable organizations. They also don’t affect volunteering for public, private or religious nonprofit organizations.

The FLSA requires employers to treat most internships as employment and pay at least minimum wage.

To be unpaid, an internship for a for-profit company must meet these narrow guidelines:

1. The internship experience should be for your benefit and be similar to training you’d receive in an educational environment.

Your unpaid internship should feel like an educational experience. This could be the case if:

  • Your school or department oversees and structures the internship.
  • You receive academic credit for the internship.
  • You’re learning skills you can apply to several jobs, rather than ones specific to this company.
  • You receive training or do work for your educational benefit that doesn’t necessarily benefit the company.

Your internship might not meet this criteria if:

  • You’re performing routine tasks for the company on a daily basis. Think: data entry, filing, customer service, making coffee, etc.
  • The company depends on and directly benefits from the work you do.

For example, in my internship, I was producing content for the company’s blog. The company benefitted financially by running display ads and sponsored content on the site, in addition to growing its brand online.

Yes, I was gaining experience in my desired field and learning how to do the job. But the point of my “internship” was actually to produce content for the blog, not to educate me.

2. You should work closely under supervising staff and not displace regular employees.

As an unpaid intern, you shouldn’t fill the role of a regular employee. To ensure your experience is educational, you should instead be in a role that more closely resembles training.

This could be the case if:

  • A specific employee or supervisor is assigned as your mentor, and you receive more dedicated oversight than regular employees.
  • You know exactly who you can go to with questions, and someone is directly responsible for overseeing your internship experience.
  • You’re job-shadowing or observing employees rather than engaging in work yourself.

Your internship might not meet this criteria if:

  • The company hired unpaid interns to boost its workforce during a busy time.
  • The company hired unpaid interns to keep the regular staff from working extra hours or to avoid hiring additional paid employees.
  • The structure of your workday is the same as employees in the company.
  • You receive the same amount of training, oversight and guidance as employees in the company.

These points are where my unpaid internship really blew it.

As a blog writer/intern, I pretty much did the job of a staff writer for that company. Without other interns and me, the company simply wouldn’t have had a writing staff… and because its only product was content, there wouldn’t have been a company.

3. You shouldn’t necessarily be entitled to a job when the internship ends.

This criterion sounds like it could be to your detriment, but it’s not!

It exists to prevent an employer from calling you an “intern” to avoid paying you during a trial period of employment.

To meet this criteria, you should:

  • Know a set end date for the internship, established before you start.
  • Understand you’re not entitled to pay for your time in the internship.

Your internship might not meet this criteria if:

  • Your employer suggests they might hire you as a regular employee if you meet certain requirements during your internship.
  • Whether you’re entitled to payment for some or all of your work for the company is unclear or inconsistent.

On this point, my internship was clear from the start.

But I have applied and interviewed for a number of writing positions that listed pay as dependent on experience (“DOE”) or “negotiable” and turned to calling the position an internship when the question of compensation came up in an interview. It often came with a vague promise of pay in the future.

Not cool, guys.

What to Do If Your Internship Doesn’t Meet the Criteria

Because of my eagerness to break into the field and my lack of understanding of the industry, I didn’t do much to keep that company from taking advantage of me, or its interns in general.

I did eventually negotiate pay for the posts I was writing and effectively turn the unpaid internship into a freelance relationship. It worked out OK for me, but I wouldn’t recommend this as the best route for others in the same position.

In retrospect, I recommend trying these options instead:

1. Avoid an unpaid internship altogether.

If you’re going to put time into something, you might as well be paid for it, too, right?

Don’t settle for an unpaid internship just because you think you have to “pay your dues” or any other nonsense. Look for well-paying internships in your field first.

If you’re in a field where internships are typically unpaid, think outside the box.

Instead of searching for companies that offer internships, look for ways to turn an existing job into an educational opportunity. How can you use a regular paid position to network, learn more about your industry and earn course credit?

2. Ensure your internship is a valuable educational experience.

If you take an unpaid internship, make sure it meets the criteria. If you’re in a class that requires an internship, the instructor, department or university will probably be able to recommend great opportunities.

If your internship doesn’t meet the criteria, I don’t recommend you immediately rise up in protest or report the company for wrongdoing.

Instead, work with your supervisor to restructure the internship so it meets the criteria. Talk about what you want to learn or what course requirements you need to meet, and ask how they can make that happen.

3. Turn your unpaid internship into paid employment.

As a last resort, if your position resembles the government’s definition of employment and your employer is unwilling to change it to meet the internship criteria, ask to be paid.

I consider this a last resort — even though it’s the route I accidentally took — because an internship should be an educational opportunity.

Earning pay to make coffee or enter useless data into a spreadsheet misses the point. Doing work for free to prove yourself to a company also misses the point.

Even if you can negotiate pay for non-educational work, you should probably consider looking for a different internship opportunity. Keep the job if you want it for the money and have time, but make sure you can still get the education you deserve.

Your Turn: What are your experiences with unpaid internships?

Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more, attempting humor wherever it’s allowed (and sometimes where it’s not).

by Dana Sitar
Contributor for The Penny Hoarder

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