Pursuant to the United States' Fair Labor Standards Act (FLSA), an internship can be unpaid if it meets very specific requirements, the most important one being that "the intern's work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern." If the wording there seems a bit murky, that's perhaps intentional, considering the amount of companies who benefit from unpaid student labor each semester. The law was actually rewritten earlier this year following a string of class action lawsuits that were leveled against Fox for not paying its interns. The new law considers the seven parameters outlined in the FLSA, described as a "primary beneficiary test," as flexible, with no single factor being determinative. Unlike in years past, no threshold related to these rules has to be met. The law is now far more subjective and overwhelmingly benefits companies who wish to hire interns without paying them.
Before this, it was illegal for an employer to force an unpaid intern to go on a coffee run for the office, as this is neither educational, nor beneficial to the intern. An intern's work also couldn't benefit the company monetarily. So, if for example, Martha in accounting got behind on her work, contrary to popular belief, she wasn't allowed to ask an unpaid intern to fill out some spreadsheets for her, as this constitutes work that directly benefits the company. The law is now written in vague terms such as "complements" and "displaces" and tends to obfuscate this point. With these changes to FLSA, the Department of Labor has taken clear stance and has sided with the employers, not the interns (workers).
In a January interview with Bloomberg, Paul DeCamp, an attorney who works with employers regarding interns and labor disputes, said this about the original law: "If the intern did any productive work for the company it would -- at least based on the strict reading of the test -- be required that activity be paid, which is not to put too fine a point on it, ridiculous."
DeCamp didn't specify why the premise of paying someone for "productive work" is "ridiculous," but it's safe to assume his point of view is shared with the people writing him checks. Don't worry though, he also assured his interviewer that "if the intern is primarily doing grunt work, not learning skills, not learning about the industry, but is simply replacing work that would've been done by paid employees and therefore amounting to nothing other than free labor and with no discernible benefit to the intern, I think courts would still be willing to say that is employment." Here's the thing though, companies can always find a "discernible" benefit. In one lawsuit filed by interns at Hearst, judges ruled in favor of Hearst, despite the interns complaints about doing menial work while receiving no training. The reason for the ruling? The interns wanted careers in fashion and entertainment, and menial work constitutes "real-life experience" in their fields.
These are just the companies getting taken to court. The rampant abuse of the internship system is nothing short of systemic. In an article in Forbes, Susan Adams discusses an ad she found for the shoe company Salvatore Ferragamo. The ad was for an unpaid "retail internship" that included walking the floor and assisting customers inside of a Salvatore Ferragamo store in New York City. It's important to note that this article was from 2014, well before the labor department decided to make its rules a bit more lax. This is the kind of abuse that was possible.
The fact of the matter is, the latest adjustments to the FLSA, makes the already largely unenforceable laws surrounding unpaid internships, completely moot. There's no federal regulation in place to stop companies from abusing their interns and using them for free labor. The only recourse before was for an intern to sue his/her respective company, and now that that's off the table, those who would work unpaid internships have no real ability to fight for their rights as workers. This isn't just a labor rights issue, however.
When it comes to unpaid internships, the list of negatives is a mile long. These programs overwhelmingly benefit people who can afford to work for free. The rest of us are not so lucky, and the result is a class of applicants that is made entirely of young, upper-class college students or graduates that is neither representative of the American labor force nor fair to the many qualified people who can't get into the industry of their choosing. This is not a simple matter of millennials complaining about their job prospects. Unpaid internships create a huge barrier to entry that fosters and feeds wealth inequality around the country. Without these internships, it's harder to get entry level jobs, and by extension harder to advance in your career. Regardless of the "educational benefits," some aspect of interns' work will always help the company, and that work needs to be classified as labor. If a business isn't prepared to hire their intern at the end of the program, then why take the time to train the intern? The intern's work will always benefit their employer in some way.
Unfortunately, companies are always going to bend the rules and try to convince unassuming kids to work for less than they're worth, but if we have a system in place that helps protect that kind of skulduggery, rather than the workers themselves, are we not equally culpable for the societal damage it causes? Plenty of HR departments have determined that paying interns the minimum wage isn't worth the overhead, and it's important to understand they aren't particularly concerned with the difference between learning and labor. A company not paying someone for their work is a cost saving measure. Nothing more. There should be no such thing as unpaid labor in this country. Pay your interns.