The Great Intern Debate

Confusion over federal guidelines regulating unpaid internships is evident in at least some career centers, where employers are posting fewer opportunities on campus job boards, counselors are under false impressions regarding the legality of such jobs, and students are unsure whether they’re appropriate.

A survey released Thursday that asked more than 400 career center officials about how the unpaid internship debate is playing out on their campuses revealed these findings and others, with the clear takeaway being that no two colleges are responding the same way.

“I don’t see this ever going away. I don’t see this ever having a standard that everyone agrees on. It’s like internships in general -- there is no standard,” said Richard Bottner, founder of the research firm InternBridge, which conducted the survey along with Phil Gardner, director of research for the Collegiate Employment Research Institute at Michigan State University. “Anyone who tells you that there’s a solution is probably looking through one lens. And that’s something we try not to do.”

When the recession hit, employers began capitalizing on unpaid internships, a practice that came to the attention of the general public through high-profile coverage from The New York Times, and more recently, Ross Perlin’s book Intern Nation. The controversy reached fever pitch a little over a year ago, when the U.S. Labor Department clarified that, under the federal Fair Labor Standards Act, legal, unpaid internships at private businesses would have to satisfy six guidelines. Under the criteria, an intern must: benefit from the job; work under close supervision; not displace regular employees; not provide an “immediate advantage” for the employer and possibly even impede the employer; not necessarily be entitled to a post-internship job; and understand, as should the employer, that he or she is not entitled to wages.

Despite the fact that the announcement didn’t actually change anything in terms of legal standards or requirements, some college presidents spoke out against the regulations, arguing that they would have a “chilling effect” on employers’ willingness to engage students in experiential learning. There has also been much concern over the clarity of the guidelines, and the survey made that apparent. “The last year and a half has really turned the world of unpaid internships on its head,” Bottner said.

Only three-quarters of career counselors said they have a clear understanding of the federal guidelines. “That’s a startling number ... a little bit unsettling,” Bottner said, noting that the six-prong test is not particularly complicated. Nearly 20 percent of respondents said internships require payment to be legal (which is not true), and slightly more said internships without academic credit or payment are legal (also not true). In order to be legal, internships must require either compensation or academic credit, but not both. (While the guidelines do not address pay, a separate opinion letter left room for colleges to offer credit in lieu of employer compensation, Bottner said.) Interestingly, 11 percent of respondents believe it is unequivocally "improper to support unpaid internships," and 10 percent "actively discourage" students from taking them.

The extent to which the debate is felt varies by institution. For instance, while nearly one in five career centers reported employers not posting internships due to concern (or confusion) over legality issues, at the University of South Carolina, postings of both paid and unpaid opportunities are at “historic levels,” said Career Center Director Tom Halasz. That squares with data from the survey, which showed that employers are offering more openings of all types, though the increase of unpaid internships was greater than that of paid ones.

South Carolina does not discriminate when posting opportunities; it requires only that employers make clear whether students would be paid. Halasz said that the recent focus on the ethics and legality of unpaid internships has not affected operations at his career center. “There really hasn’t been an issue regarding the debate about paid and unpaid. We collectively, as a career center, believe students should be paid for their work,” he said. “We do have responsibilities to our students. And to the extent that we can help them identify positions that are paid, we will do so. However, it comes down to the student’s decision.”

And oftentimes, when push comes to shove, students who need the experience for their résumé -- and sometimes for a graduation requirement, which 55 percent of survey respondents said is in place for at least some academic departments, and 20 percent said is in place in either a majority of or all departments -- will “take what they have to take,” Halasz said.

This points to a key ethical quandary surrounding unpaid internships: the extent to which they push students from low-income backgrounds out of the running for employment. These students typically don’t have an in for the coveted internships that do pay, and can’t afford to take those that are unpaid (which, if legal, would require students to pay for the accompanying academic credit, as well).

“Our student population at this campus is in the low socioeconomic demographic, and so they don’t have those opportunities. Their work experience will be geared around fast food and retail,” said Christina Rodriguez, internship program coordinator for the business and public administration college at the California State University at San Bernardino. “If we can get more paid opportunities that are relevant to their course of study, it puts them in a better position to compete when they graduate. And that’s really what this college decided was important.”

Six months ago, the college stopped posting unpaid internship opportunities at for-profit companies. While it has triggered an overall decline in postings, regardless of compensation offered, Rodriguez has noticed something encouraging: an uptick in paid opportunities, from 24 percent of total postings in 2010, to 47 percent in 2011. (Rodriguez said the total number of unpaid postings hasn’t gone down because the college continues to source nonprofit opportunities, so the ban on unpaid, for-profit postings percentages has not inflated the percentages.) The business college was one of the 21 percent of respondents that said students have inquired about the legality of unpaid internships.

The vast majority of career centers don’t ban all unpaid postings (when they do, they’re largely from private businesses). But Bottner cautions against career centers taking on a policing role. “Colleges need to do something. I don’t think it’s appropriate for career centers to sit on the sidelines,” he said. “But I think the role of the career center is an awareness issue…. It’s not the university’s job to police the employers' legal requirements.”

Rather, career centers should focus on educating students about the ethical and legal questions surrounding unpaid internships, Bottner said -- so he was dismayed by the survey's findings that only half of career centers do this. “That number to me should be 100 percent,” he said. “There’s no reason that career centers can’t raise awareness without taking a hard line.”

The survey found that half of career counselors agree with Rodriguez that unpaid internships negatively affect underserved populations. (About one in five colleges have some sort of system in place to compensate unpaid interns.) But Bottner and Gardner have analyzed student data and found that the impact may not be as strong as some believe. “In some cases that is true, but not in all,” Bottner said. “It really depends on the sector and type of internship.” For instance, for-profit companies “highly favored” business, engineering and communication majors when selecting interns, while arts and humanities, education and social science majors were overrepresented among nonprofits.

While about 20 percent of career centers said government agencies should do more to monitor internship quality, and 41 percent said they should do the same for intern compensation, how this would play out is unclear. “At some point we are going to need some legal direction,” Bottner said. “I don’t know what form that would take. Ultimately, it will probably be court cases, but at this point there haven’t even been lawsuits filed.”

But colleges shouldn’t sit around and wait for that to happen, Rodriguez said. “I think we should move forward, and interpret [the DOL guidelines] the best we can,” she said, adding that she thinks the guidelines are in fact clear. “If we wait for additional intervention or guidance, that puts everyone on hold, including our students. And that, to me, is the biggest crime.”