All Work and No Pay

With college graduation here and graduates unable to get full time jobs, many are turning to unpaid internships to at least get some experience. But, are those internships legal?

All Work and No Pay Unpaid internships used to be standard fare in many professions. These days, it pays to take a closer look at the opportunities you’re providing the new work force — because the IRS sure is. By Buddy Nevins

For almost a year before he graduated, Florida State University student Dan Daley left his stuffy political science classroom and his dry textbook behind. He interned for the Republican Party of Florida in Tallahassee answering telephones, finally working his way up to meeting some of the best and brightest GOP campaign operatives. After his internship with the Republicans was done, he took a second internship with a Democratic legislator in the state Capitol.

“It was a dream come true for somebody interested in politics,” Daley said. “I learned sooo much.”

Daley had the perfect intern experience. He and his employers benefitted — and he learned so much about grassroots politics that he is now running for office himself.

Tens of thousands of U. S. students work at a kaleidoscopic variety of internships every year.

In the past two decades, interning has become as important a part of higher education as the old apprentice system once was in the trades. In 2008, the National Association of Colleges and Employers found that 50 percent of graduating students had internships at one time during their studies.

Students in the M. E. Rinker School of Building Construction at the University of Florida have worked alongside professionals helping build roads and government buildings throughout the state. Students at the University of North Florida’s Department of Criminology and Criminal Justice take jobs with 60 agencies, from the U. S. Marshal’s to the Jacksonville Mayor’s Office. Florida State University’s English Department has a 13-week internship writing for non-profit agencies, government, public relations firms, the media, the university and other businesses across North Florida.

Lauren Loeffler, director of career services for the University of West Florida in Pensacola and Fort Walton Beach, said becoming an intern is one of the most valuable parts of higher education. She helps match hundreds of students with employers every year.

“It’s a tremendous learning experience. It provides direction in life. We consider it a success if a student comes back and hated the job or if the student loved the job. Either way, the student is getting some direction for the future,” Loeffler said.

What’s in it for employers? One benefit is self-fulfillment. “Many supervisors simply enjoy sharing their expertise and savvy in their roles as professional mentors,” said Michael True, director of the Intern Center at Messiah College in Grantham, Penn. True is a nationally-recognized expert on interns who has written guides and operates international websites on the subject.

Perhaps the No. 1 reason employers hire interns is that it’s an easy way to recruit and evaluate potential employees, according to True. “Employer respondents to a national survey reported higher retention rates for those with internship experience, compared to those who had none,” he said.

“It’s a great opportunity for employers to try before they buy,” Loeffler agreed.

That’s what happened to Daley. His boss at his second internship, state Rep. Ari Porth, D-Coral Springs, liked him so much he hired him as his full-time aide when he graduated FSU in June 2009.

“He was enthusiastic and very helpful,” Porth said. “I saw he was an asset to have around.”

Employers hiring an intern also get a highly motivated student with the latest skills. For instance, an employer approached UWF last year with a request. They wanted an intern who could help them set up a social media marketing program.

“The student had experience with social media and they could teach the student about their business. Both sides benefitted,” Loeffler said.

The downside of internships is that successful programs take time and effort by managers, who must both supervise the interns and follow rules set up by the colleges and universities. Some schools even send officials to the work site to check on the interns.

True recommended that the most important place for a business to start is with a written plan. The plan should map exactly what is expected from the intern. Managers need to follow the plan. Since intern programs are usually no more than three months, resources must be ready for the incoming student. A work area should be set aside and the necessary equipment such as computers need to be reserved.

CBS TV affiliate WCTV in Tallahassee has a carefully developed blueprint for students who intern in its news department. The day-by-day guide prepares interns for everything they may face and what they are required to learn during the month-long program. Each day is filled with very exhaustive learning, much of it from prepared handouts the station has developed.

It starts the first day with interns learning what clothes to wear, newsroom etiquette, some legal training and WCTV’s overall philosophy. On other days, interns are helped with writing broadcast scripts and copy for the Internet. They are taught how to operate the equipment and pull footage from the archives. They are given instruction on how to prepare the five stories they are required to complete during internship. On the 30th day, interns tape a mini-newscast of them at the anchor desk, which they will put on a DVD to take back to college.

A key decision for every employer is whether or not to pay an intern.

In 2010, amid the recession, there was an increase in interns not being paid for work. Employers looking to save money hired interns for nothing rather than a regular employee. “With the recent economy, we have seen a surge in unpaid intern requests,” UWF’s Loeffler said. In response and to insure interns are not being abused, the U. S. Labor Department issued six rules that had to be met to avoid violating labor laws.

According to the U. S. Labor Department in 2010, any unpaid intern program must:

• Be run for the benefit of the intern.
• Allow the intern to work under close supervision and not displace regular employees.
• Not provide the employer with a competitive advantage.
• Emphasize that the intern is not automatically entitled to a job after the internship.
• Make it crystal clear that that the intern will not be paid.
• Be “similar to training which would be given in an educational environment … the more an internship program is structured around a classroom or academic experience as opposed to the employer’s actual operations, the more likely the internship will be viewed as an extension of the individual’s educational experience.”

UWF carefully vets each request for an unpaid internship. “They have to meet the Labor Department’s six-prong test,” Loeffler said.

Many colleges hold tight on interns to guarantee that the experience is educational. The University of North Florida’s Department of Criminology and Criminal Justice is a typical example. Seniors are given six credits to work in North Florida law enforcement, government and non-profit agencies. They are required to write a paper on their experience and share details with other students and faculty.

Many internships do pay, although students shouldn’t expect more than minimal salaries. The 2010 interns from the Rinker construction school at the University of Florida averaged $13.76-an-hour, paid by a wide range of businesses from general contractors to subcontractors to residential developers.

David Silverman, who is due to graduate Florida State University in April 2011 with majors in criminology and political science, didn’t get paid. He interned for Broward County Judge Gisele Pollack during his junior year, and the court system had no money available for interns. Pollack introduced Silverman to many aspects of the court system as a way to make his studies come to life and prepare him for law school.

“Rarely did I have to file, make copies or run around the courthouse dropping papers off to other judges. Judge Pollack wanted me to get the most out of my internship,” Silverman said. So he attended court with the judge and spent time with public defenders, private lawyers and prosecutors to understand the process from their point of view. The judge arranged for bailiffs to show Silverman their job inside the courthouse.

Pollack was following the guidelines developed by True. “Care should be taken to make all experiences worthwhile for the student, whether compensated or not,” True said.

That is exactly the kind of experience Silverman got. “Seeing and being so close with each participant in the courtroom really allowed me to see the many options in the field of law,” the FSU student said.

Decoding Internships

According to the Fair Labor Standards Act (FSLA)

“Similar to an Education Environment” and “Primary Beneficiary of the Activity”
In general, the more an internship program is structured around a classroom or academic experience as opposed to the employer’s actual operations, the more likely the internship will be viewed as an extension of the individual’s educational experience (this often occurs where a college or university exercises oversight over the internship program and provides educational credit). The more the internship provides the individual with skills that can be used in multiple employment settings, as opposed to skills particular to one employer’s operation, the more likely the intern would be viewed as receiving training. Under these circumstances the intern does not perform the routine work of the business on a regular and recurring basis, and the business is not dependent upon the work of the intern. On the other hand, if the interns are engaged in the operations of the employer or are performing productive work (for example, filing, performing other clerical work or assisting customers), then the fact that they may be receiving some benefits in the form of a new skill or improved work habits will not exclude them from the FLSA’s minimum wage and overtime requirements because the employer benefits from the interns’ work.

Displacement and Supervision Issues
If an employer uses interns as substitutes for regular workers or to augment its existing workforce during specific time periods, these interns should be paid at least the minimum wage and overtime compensation for hours worked over 40 in a workweek. If the employer would have hired additional employees or required existing staff to work additional hours had the interns not performed the work, then the interns will be viewed as employees and entitled compensation under the FLSA. Conversely, if the employer is providing job shadowing opportunities that allow an intern to learn certain functions under the close and constant supervision of regular employees, but the intern performs no or minimal work, the activity is more likely to be viewed as a bona fide education experience. On the other hand, if the intern receives the same level of supervision as the employer’s regular workforce, this would suggest an employment relationship, rather than training.

The FLSA makes a special exception under certain circumstances for individuals who volunteer to perform services for a state or local government agency and for individuals who volunteer for humanitarian purposes for private non-profit food banks. The Department of Labor (DOL) also recognizes an exception for individuals who volunteer their time, freely and without anticipation of compensation for religious, charitable, civic or humanitarian purposes to non-profit organizations. Unpaid internships in the public sector and for non-profit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible.

— U.S. Department of Labor Fact Sheet #71