It has become increasingly common for college students and recent graduates to seek internships in order to build their resumes for success in a tough job market. More than half of American college students that graduated in 2011 took internships during their four years at college, and subsequent classes have followed suit. Emmanuel Kim '15, who worked at an investment firm over the summer, is an example of this trend. Coming in with no experience, he received training project by project, learning important skills such as marketing, networking and financial product differentiation while doing research for his employer. He didn't get paid, but he didn't mind because he picked up valuable skills and experience. His employer didn't mind, either, because Emmanuel did some work for them. It was a win-win situation.
The positions of interns like Kim, however, may be jeopardized by ongoing lawsuits and a movement that seeks to punish companies who do not follow Department of Labor guidelines and/or eliminate unpaid internships altogether. According to criteria established by the Department of Labor, internships at for-profit employers do not have to follow normal regulations regarding compensation as long as the employer derives no immediate benefit from the interns (and may, in fact, expend resources on them), the experience is for the intern's benefit, training is similar to learning in an educational environment and the intern does not displace regular employees. What this means is that such interns do not have to be paid minimum wage or for overtime work, as long as they aren't performing productive work.
Were these rules rigorously enforced, Kim could not have gotten his internship in the first place. Although he received plenty of training and positive experiences even voluntarily working extra hours he also did research work that obviously benefitted his employer. According to the law, he should have been paid at least minimum wage for his work, even though the company spent resources training him. Several recent lawsuits filed by unpaid interns, such as one against Hearst Corporation, the parent company of a number of publications including Harper's Bazaar, are attempting to get courts to rule exactly that.
If the lawsuit succeeds, employers will be stuck between the proverbial rock and a hard place. If they want to take on inexperienced interns, they will be left with two choices: either pay them at least $7.25 per hour and make them spend almost all of their time working (since they lack skills, they don't produce much more than that for the company); or not pay them, not have them work and actually lose money by training them. Since companies aren't charities, you can't expect them to do the latter, so you end up with a lot of kids stuck mostly doing menial work instead of building skills.
There is also another dimension to this: Interns from poorer backgrounds often cannot afford not to have an income. These kids don't have the luxury of taking a no-pay internship: They have to have some pay.
A good middle-ground solution would be to allow students to do a mix of work and training while earning less than the minimum wage. This would allow interns to earn compensation for the useful work they do while still giving companies some leeway since they wouldn't have to pay the interns as much, they would be able to afford to invest more time in their training instead of making them file papers and bring their bosses coffee.
Although such stipended-internships already exist, especially at nonprofit organizations, current law doesn't allow for such contracts at for-profit companies. Hence, the solution would be to amend the law in order to eliminate the legal threat to them. One of two things must be eliminated the minimum wage, or the requirement that employers pay it to interns who do work that benefits them.
It may seem unfair that students who want valuable training would have to take very low pay under such a regime. However, students are already willing to take no pay for that experience right now, and the very fact that students are willing to take the job suggests that unpaid internships are not only fair but also beneficial for both employer and employee. Eliminating either the minimum wage or the requirement that it be paid to interns could thus only open up more opportunities for employers who want interns to take on students who want internships.
