Unpaid Internships

Employers, universities, and policymakers have scrutinized the issue of unpaid
internships for a long time. They have intensely questioned the legality and fairness of unpaid
internships. Many of the questions remain unanswered as the issue is still highly controversial.
Unpaid internships have been found to have benefits and limitations in equal measure. The idea
of unpaid internships seems to potentially benefit college students seeking to gain relevant
experience and a footing in a rather competitive labor market. Also, employers seeking to keep
their expenses down may consider unpaid internships. While their output is almost similar to that
of employees, unpaid internships come at no cost to the employer. Unpaid internships are a
barrier to social mobility as students do not benefit financially from services offered and are
exploitative as the employer benefits at the expense of the college student. This paper examines
the issue of unpaid internships, their benefits, drawbacks, and existing laws and legal issues on
the same.
Many college students take part in unpaid internships every year. Although no official
records show the exact number of these interns, it is estimated that approximately 1.5 million
college students take part in unpaid internships each year (Reid). An estimated 38% of these
internships occur in for-profit companies (Reid). Internships have been given a lot of importance,
with about 84% of students showing intention to take part in internships before graduation

(Pasternack 193). Internships, therefore, attract a very high number of college students.
Companies are willing to take in these students on an unpaid basis since there is a high demand
for internships.
Employers believe that unpaid internships present college students with an invaluable
opportunity to gain relevant work experience. A survey conducted in 2012 revealed that one of
the important factors that employers consider when selecting employees in an interview is
whether they had an opportunity to intern (Rothschild and Connor 2). It, therefore, seems that an
internship experience is one of the most important credentials that a recent graduate can include
on their resume. Therefore, from the employees’ perspective, candidates who complete an unpaid
internship stand a better chance of getting a job opportunity compared to their counterparts who
fail to get such an opportunity. About 79% of employers cite internship experience as an
important factor during the hiring process (Rothschild and Connor 3).
Given the importance attached to internships, then one of the important issues arising is
whether employers can detect a disparity in the quality of work provided by employees who once
worked as interns and those that did not. However, most employers reported that there was no
notable difference in the quality of work offered by employees who had internship experience
and those that missed such opportunities. Also, there was no notable difference in the output of
employees who received paid internships and those that received no pay during their internship.
However, some employers noted that paid interns showed a sense of accountability and
responsibility compared to their unpaid counterparts. They seemed to care more about the quality
of their output and its effect on the success of the organizations (Rothschild and Connor 11).
Thus, when weighing in on the issue of paid versus unpaid internships, it is important to consider
the impact that each has on the student.

Unpaid internships tend to hinder social mobility and income accessibility for low-
income students. These programs effectively exclude certain students from taking part. While
students from wealthy families can comfortably take unpaid work opportunities, the case is
different for students from low-income families. Students from wealthy families have resources
and enough capital to sustain themselves as they work for ‘free.’ Unpaid interns often have to rely
on parental or guardian support for financial support during the period when they receive no
compensation for their work. Therefore, unpaid internships continue to widen the gap between
the upper-class citizens and low-class citizens in the country (Rothschild and Connor 4). While
unpaid internships may be an attractive offer for students from high-income families, the case is
different for students who have to work to sustain their stay in college. Unpaid internships are
thus an opportunity that seeks to benefit just a percentage of the American college student
population.
Further, unpaid internships seem to disadvantage poor students in that they do not have
access to the same opportunities as their paid counterparts. Studies show that paid interns often
work in for-profit companies. They spend most of their time building their professional skills.
Unpaid interns, however, tend to spend a significant part of their time on clerical duties, which
do not have significant value on their professional skills. Poorer students are more likely to intern
in small companies that are non-profit (Rothschild and Connor 5). They are also likely to spend a
lot of their time on clerical tasks and menial jobs. They are thus disadvantaged compared to their
wealthier counterparts, who are more likely to intern in large for-profit companies. These
companies are likely to pay their interns and therefore ensure that they get value for money paid.
These interns are likely to be involved in serious work that adds value to the company and
consequently benefits them as they gain professional experience. Thus, poorer students are

disadvantaged more when it comes to unpaid internships. While they have limited places where
they can work due to financial constraints, they end up interning in small for-profit companies,
which not only fail to compensate them but also do not provide adequate learning opportunities
for these students.
Notably, studies show that large for-profit companies tend to offer employment
opportunities to 55% of their interns (Rothschild and Connor 6). This ensures that the students
from wealthier family backgrounds stand a better chance to secure employment in well-paying
companies immediately after completing their internship programs. However, statistics show that
small non-profits only offer 5% of interns full-time employment (Rothschild and Connor 6).
Thus, students who are mostly from poor family backgrounds who intern in these organizations
stand very little chance of getting full-time employment after completing their internship
programs. The issue is that these interns were not even getting any compensation. Thus, they lose
twice; they miss out on a chance to get employed and miss out on the financial benefits of
working in these small companies.
Apart from limiting the social mobility of college students, unpaid internships lack legal
protections. The Federal employment law seeks to protect all employees from unfair treatment
while in their places of work. However, after the Smith v. Berks Community Television and
O’Conner v. Davis court case decisions, it became apparent that unpaid interns do not qualify as
employees since they do not receive any compensation for services offered (Rothschild and
Connor 7). The protections offered by the employment law do not extend to unpaid interns.
Further, in 2013, a district court made a ruling in the Wang v. Phoenix Satellite Television U.S.,
Inc. that further showed that interns are not protected by the employment law (Rothschild and
Connor 7). In this case, an unpaid intern complained of consistent sexual harassment by a senior

employee. The court ruled that the unpaid intern was not protected by the employment law in the
state of New York. The court cited that she was not recognized as an employee under law as she
was not compensated by the employer.
The court ruling set a dangerous rend here unpaid interns could now be harassed at their
places of internship since the law did not offer them any protection. Unpaid interns did not meet
the definition (statutory) of an employee. The court ruling raised other issues regarding the
protection of persons with disability if they sought internship opportunities. It would then mean
that persons with disability and any other person seeking an internship opportunity could be
openly discriminated against because the existing laws do not extend them any legal protections.
Universities and colleges should be proactive in protecting their student interns (Rothschild and
Connor 8). However, student interns remain unprotected until there are adequate laws seeking to
protect them or until the statutory definition of the term employee is revised to include students
who take up unpaid internships in different organizations. In 2017, the Federal Intern Protection
Act was the first step taken legally seeking to protect interns. However, not much has been
achieved since the bill was passed to the Senate. The legislators should take steps toward
protecting interns. Until then, these college students remain unprotected.
Unpaid interns not only receive compensation for their work but also raise serious legal
issues. Under the Fair Labor Standards Act (FLSA), unpaid internships are illegal. The FLSA
clearly outlines conditions for employees and the minimum wage to be extended to anyone
offering their services to a company (Verghese 2). The Act requires that the first forty hours of
work should be paid as this is the minimum wage of each employee. In the Walling v. Portland
Terminal Co., the court made a ruling that interns or students training with a company and do not
get compensated do not qualify as employees (Verghese 3). The ruling also redefined the term

employee to include interns or individuals who worked solely for their personal benefit as
opposed to the organizations.
During President Obama’s administration, the Department of Labor (DOL) went hard on
companies that offered unpaid internships. The government argued that unpaid internships were
unfair and exploitative (Peek). These programs offered greedy companies an opportunity to
continually get access to employees at no cost. Thus, greedy corporations were called out by the
government through the DOL’s new set of rules on internships. The DOL stated that in the case
of unpaid internships then, it must be clear that the company did not derive any benefits but
instead, the opportunity was solely beneficial to the intern. The DOL further demanded that the
internship program be offered in an “educational environment” in that interns did not take the
place of regular employees.
Further, based on the rules provided by DOL, several companies that continued offering
unpaid internships found themselves being sued. For instance, Fox Searchlight Pictures was sued
for not paying its two interns who performed the duties regular, consequently benefiting the
company at no pay. However, while President Obama’s administration opposed unpaid
internships, it was established that the 1600 interns who worked at the White House were unpaid
(Peek). Thus, while his administration sought to stop unpaid internship programs, its own interns
at Whitehouse remained unpaid. Even though, during President Obama’s term in office, many
companies started paying their interns. Most that could not pay stopped offering internship
programs.
Further, the administration of President Trump did not offer any reprieve for unpaid
interns. Companies still continued working with interns without compensating them. In 2018,
President Trump’s administration, through the DOL, withdrew the six-prong test for unpaid

internships and introduced President Obama’s term (Rothschild and Connor 9). The DOL then
introduced a seven-factor test that was to be used to determine the beneficiaries of an unpaid
internship. The government held that if it was determined through the seven-factor list that the
primary beneficiary of the internship program would be the student, then it would be legal for
such an individual to work without being compensated.
However, President Biden’s administration seems to be offering a promising future for
interns both at the Whitehouse and in the corporate world. The Biden administration has already
come up with a way to compensate interns working at Whitehouse. For the first time in U.S
history, Whitehouse interns will be paid. Senate passed a $1.5 trillion government funding bill
(Cohen). The bill is inclusive of $4.5 million that has been set aside to finance the internship
program at the Executive office (Cohen). The Whitehouse is setting a good example. The
country and the student population can only wait and see whether organizations will be
compelled to also do the same. It is hard to imagine that students are expected to exchange
“experience” on their resumes for labor. This is a form of exploitation that should be called out
by the leaders of today.
While unpaid internships have been associated with many challenges and drawbacks,
there exist several advantages linked to the programs. Unpaid internships are supported by
Kolb’s theory of experiential learning which holds that experience is vital for the learning
process to take place. Experiential learning in this context refers to a holistic perspective that
integrates cognition, experience, behavior, and an individual’s perception (Kolb 23). Experiential
learning then takes place through substantive fur steps. First, an individual engages in acquiring
concrete experience and reflects on it. Then, the third step is the abstract conceptualization, and

lastly, which is what happens during unpaid internships, an individual gets an opportunity to
engage in active experimentation.
Therefore, experiential learning is crucial in the formal instruction offered to students in
institutions of higher learning. First, colleges and universities want to produce students that have
a competitive edge in the labor market. Also, students in institutions of higher learning deserve
to be exposed to a variety of modes of learning. Other than the learning that takes place within
classrooms, unpaid internships offer students another opportunity to learn in a different setting
other than the classroom (Rothschild and Connor 4). Besides, based on Kolb’s theory, many
aspects of success in college are affected by the opportunity to engage in experiential learning.
Therefore, based on Kolb’s theory, unpaid internships are an important component of formal
instruction. College students get an opportunity to experience the job market while they learn.
Thus, by the time they graduate, they already know what is required of them to fit in the job
market.
Further, studies have supported Kolb’s argument by stating that experiential learning is
compatible with internship programs. According to Simmons et al., students get an opportunity
to grow and develop professionally, personally as well as civically (325). They acquire higher
levels of cultural competency as they get an opportunity to interact with people from different
cultural backgrounds. The interns also have increased preparedness for the actual job, and this
boosts their confidence (Simmons et al. 327). Experiential learning is therefore beneficial to
students. They get an invaluable opportunity to learn and interact firsthand with those who have
a wealth of experience in the field that they are interested in joining upon graduation.
However, while Kolb’s theory on experiential learning makes sense, it makes one wonder
whether the only way for college students to gain experience is by offering free labor. While

Surname 9
Kolb supports the idea of gaining experience while at college, he does not necessarily state that
this experience is best earned in situations where the individual is not compensated for services
offered. Students can gain experience, be exposed to various modes of learning, and still get
compensated for their work. Kolb’s argument fails to acknowledge that experience does not
necessarily have to be gained through free means. Employers and colleges that use Kolb’s
argument overlook the fact that as student interns gain experience, companies also benefit. They
save on hiring costs. The issue is that each year, there are thousands of students applying for
internship opportunities. Companies, therefore, can afford to rely significantly on this source of
free labor while they save thousands of dollars each year on wages. Unpaid internships are,
therefore, a form of exploitation in the modern labor market. Legislation is necessary to govern
this sector. The lack of such laws exposes thousands, if not millions, of interns to unpaid
programs.
Overall, the debate on the legality and fairness of unpaid internship programs continues.
Different leaders have had divergent views on the same. From an employer’s perspective, the
intern benefits by gaining invaluable experience, which, when included in their resume, gives
them a better opportunity to secure employment in the future. Student interns, on the other hand,
may feel exploited since they report to work daily during the entire internship program and offer
services just like full-time employees. While the company benefits, the interns lack monetary
compensation, and the benefit of “experience” cannot be quantified. It is hard to say that anyone
who goes through an internship immediately secures employment after completing college. If
that were the case, then employment rates would be much lower. Thus, while these programs
seek to benefit the student, they should be compensated so that they can reap both the short-term
as well long-term benefits of being interns. Besides, for-profit companies make a lot of profit.

Surname 10
They can therefore afford to set aside a part of their earnings for purposes of compensating
interns. Besides, given the drawbacks associated with unpaid internship programs, colleges
should push to have their students compensated whenever they work as interns.

Works Cited

Cohen, Steve. “Unpaid Internships Are Unethical And Wrong”. State Of The Planet, 2022,
https://news.climate.columbia.edu/2022/03/21/unpaid-internships-are-unethical-and-
wrong/.
Kolb, David A. “Experience as the source of learning and development.” Upper Sadle River:
Prentice Hall (1984).
Pasternack, Chad A. “No Pay, No Gain: The Plus Side of Unpaid Internships.” J. Bus.
Entrepreneurship & L. 8 (2014): 193.
Peek, Liz. “Obama Criminalized Unpaid Internships And Killed Jobs”. The Fiscal Times, 2013,
https://www.thefiscaltimes.com/Columns/2013/06/19/Obama-Criminalized-Unpaid-
Internships-and-Killed-Jobs.
Reid, Patricia. “Fact Sheet #71: Shortchanging The Unpaid Academic Intern”. U.F. Law
Scholarship Repository, 2015, https://scholarship.law.ufl.edu/flr/vol66/iss3/9/.
Rothschild, Philip, and Connor Rothschild. “The unpaid internship: Benefits, drawbacks, and
legal issues.” Administrative Issues Journal: Connecting Education, Practice, and
Research 10.2 (2020): 1-17.
Simons, Lori, et al. “Lessons Learned from Experiential Learning: What Do Students Learn from
a Practicum/Internship?.” International Journal of Teaching and Learning in Higher
Education 24.3 (2012): 325-334.
Verghese, Apoorva. “Hillary Clinton and the Ethics of Unpaid Political Internships.” Women
Leading Change: Case Studies on Women, Gender, and Feminism 6.1 (2022): 38-55.