There seem to be a lot of interns suing their employers lately. What’s the deal?
The deal is they now have reason to believe they can win. It started on June 11, when a federal district court judge in New York ruled that Fox Searchlight Pictures, a film distribution company, should have compensated two unpaid production interns for the 2010 movie Black Swan. The pair had performed basic chores such as manning phones, fetching coffee, and taking out the trash. According to the judge, “Searchlight received the benefits of their unpaid work, which otherwise would have required paid employees.” The victory opened the door for more disgruntled interns. On June 13 a former intern for W magazine and another for the New Yorker filed a lawsuit against publisher Condé Nast claiming they had been paid less than $1 an hour. On June 17 a former Atlantic Records intern filed a lawsuit against Warner Music Group citing unpaid wages for office work performed from October 2007 to May 2008. Eight former magazine interns collectively filed suit against the publisher Hearst in 2011, but the case was dismissed in May because the judge denied its class-action status. Those interns have requested an appeal.
What does this mean for employers? If a company currently has unpaid interns, should they start paying them?
Companies in the U.S. can legally hire unpaid interns as long as they follow six U.S. Department of Labor guidelines under the Fair Labor Standards Act. The law says that interns cannot “displace regular employees.” It also stipulates that “the employer that provides the training derives no immediate advantage from the activities of the intern.” But Turner argues that unpaid arrangements will disappear in the wake of the verdict: “I think it would be the very rare internship that would meet the criteria that are set forth in this decision.” Allison Cheston, a career coach who teaches a workshop at New York University about how to land your dream job, agrees. “The guidelines laid out by the Department of Labor for internships are pretty strict,” she says. “For most corporations, we’re heading in the direction of internships being paid positions eventually.”
What about an unpaid internship that offers college credit?
“Most of the top schools in the country won’t accept an internship as academic credit anymore,” says Cheston. “It’s a moot point.” The one type of company that may still be able to get away with not paying interns are non-for-profits. “I understand why nonprofits don’t pay interns,” says Cheston. “You can learn a lot in that environment. Non-profits tend to be less staffed, so there are more opportunities to be thrown into unique learning experiences that they wouldn’t normally be exposed to.” But even a non-profit should be careful. After all, Charlie Rose, a TV host whose eponymous show airs on the Public Broadcasting Service (PBS), a non-profit public broadcasting television network, was sued last year by approximately 190 unpaid interns. Rose ended up settling out of court in December, paying up to $250,000 in back wages; about $1,100 for each intern.
Just over a grand? That’s not a lot of money. How much do some of these other interns stand to make if they win their lawsuits?
According to Turner, in the Black Swan case, plaintiffs Glatt and Footman will “at the very least… seek unpaid minimum wage plus overtime.” No word yet on how many hours they claim to have worked, but California’s minimum wage is currently $8 an hour. Whatever the final number, it won’t be a windfall.
If it’s not for the money, why are interns suing? Don’t unpaid internships usually lead to paying jobs?
Rarely. The National Association of Colleges and Employers published the results of a survey last summer, showing that just 37% of 2012 graduates who worked in unpaid internships received any paying job offers. Graduates who worked in paid internships, however, were offered jobs 60% of the time. Even more depressingly, graduates who didn’t do any internships at all were offered jobs just 1% less often than the unpaid intern.
So these lawsuits are ultimately a good thing?
Not according to Heather Huhman, a career advisor and author of Lies, Damned Lies & Internships, who thinks these lawsuits could be more harmful in the long run. Although she thinks interns do have a right to be paid, a lawsuit will only make matters worse. “Win or lose, getting into a lawsuit with an employer can blacklist you from being employed elsewhere,” she says. “You take a vindictive stance against an employer, and that’s not going to make another employer feel very comfortable.” They should be more concerned with the quality of an intern experience than the monetary rewards, she says. The Black Swan interns, for instance, were essentially doing basic chores, like answering phones and taking out the trash, which doesn’t exactly make for impressive resumé fodder. “They could’ve been paid thousands of dollars and it still would’ve been a crappy internship,” Huhman says.
Do any interns actually make thousands of dollars?
Some do. The average Google intern makes around $5,787 monthly. And a research intern at Microsoft can pull in a whopping $7,050 per month, according to job rating company Glassdoor.
Wow. What about the lowest an intern can make? I guess it’d be zero.
Actually, the lowest an intern has been paid is a bill for $26,000.
What? Somebody paid $26,000 to be an intern?
They did. A six-week internship with the UN-NGO Committee on Human Rights was auctioned off in May on the website CharityBuzz. The listing, as part of a fund-raising effort for the Robert F. Kennedy Center for Justice and Human Rights, promised “inside knowledge of just how the UN really operates and have tremendous opportunities to make invaluable connections. This truly is the ultimate internship opportunity for any college or graduate student looking to get their foot in the door!” The internship’s value was originally listed at $10,000, but the winning bidder, identified only as “m.alam,” coughed up a staggering $26,000 for the opportunity. It’s not the first time an internship has come with a price tag. Last year, a Bristol, U.K.-based recruitment agency called Etsio was charging interns, according to their website, “from £50 to £140 a day” for a typical internship. The bigger the job, the more you paid. Interns were given the fun name “Assisterns” to make it seem less like slave labor.
How’d that work out for them?
Not so well. Founder and CEO Kit Sadgrove put Etsio on hold “due to lack of demand,” but he still believes in the value of his business model. “It was an astonishing opportunity, but it raised a lot of antagonism,” Sadgrove says. “This taught me there’s a culture of entitlement. People don’t believe they need to invest in themselves. People spend tens of thousands of pounds or dollars getting a degree, and then carp at spending a few bucks that equip them to earn a living. It’s a strange world.”
(This story originally appeared, in a slightly different form, in Bloomberg Businessweek.)