Internships and Wages

A recent decision by a New York federal judge has raised a number of issues concerning unpaid internships. It was decided in this case that two interns working on the set of the film Black Swan should have been paid, given that the work they accomplished did not meet the six criteria used for determining that an internship may be unpaid, as published in a fact sheet by the U.S. Department of Labor (which are interestingly the same criteria published by the Ontario Ministry of Labour):

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

2. The internship experience is for the benefit of the intern;

3. The intern does not displace regular employees, but works under close supervision of existing staff;

4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;

5. The intern is not necessarily entitled to a job at the conclusion of the internship; and

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

The judge found that the interns basically did the same work as paid employees. Other lawsuits have been commenced in the United States regarding unpaid internships.

In this summer season when many young people wish to gain experience and may accept unpaid internships, what should the status of unpaid interships be? Provincial employment standards legislation may exclude trainees who are part of a vocational training program from minimum wage provisions; however, it is not always clear how other types of unpaid internships are treated across the board. There seems to be just as many arguments for unpaid internships (contacts, gaining precious experience, etc.), as there are against (immoral, they skew the market, etc.) . What do you think?

 

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Comments

  1. As an entry level worker trying to break into a highly competitive market (legal academia), I do plenty of work for free. In many fields right now, it’s the only way to make the connections and gain the experience needed to move forward.

    Laws prohibiting unpaid labour rely on the paternalistic and false assumption that those of us who choose to work for free are stooges or victims.

  2. Genevieve, Noel, this is so simple to solve -why just look at what this guy’s been promoting for at least 20 years:

    According to Senator Hugh Segal (04/08/2013):

    “And, in most Canadian provinces and American states, welfare pays far less than the poverty line itself. The answer, in terms of poverty reduction for working age people, is the same as it has been over decades for seniors — automatic top-ups for those who fall beneath the poverty line….

    Never mind the core inhumanity of not helping the people whom we need as productive, taxpaying, full participants in our economic mainstream. And for those on the far right who resent “paying people to do nothing” remember this: The vast majority of folks living beneath the poverty line are working, on occasion, in more than one job, just not earning enough to get by.”

    The intern issue is a false problem, therefore we get lost in wrong solutions. Internship issue seems to be a tailormade intractable problem made for legal beagles to keep the hoi polloi in the cold.

  3. I agree. Providing a baseline standard of living is the responsibility of the state, not of employers.

  4. Jonathan Westphal

    “I agree. Providing a baseline standard of living is the responsibility of the state, not of employers.”

    Have you really thought that through, Noel? That argument could just as easily be used to defend eliminating the minimum wage.

  5. Right. If we had a comprehensive state-funded negative income tax system, then we could eliminate the minimum wage. This reform would efficiently reduce poverty with a simple guaranteed income for all.
    It would also increase employment and make the economy more productive, by letting employers offer jobs with lower wages (or no wages).

    The catches: (1) it would require higher and more progressive taxes on the rich, in order to fund the negative income tax benefit; (2) a potential moral hazard problem whereby the negative income tax discourages people from working.

  6. A “comprehensive state funded negative income tax system” has never been implemented anywhere on this planet, but thanks for the conjecture on how it would work.

    No one should be filling an advertised position doing work for a company that is working to make profits without compensation that is not in accordance with minimum wage standards, with the singular exception of volunteer positions.

  7. Andrew Langille

    It’s incredible that Ms. Lay skipped over the core issue here: unpaid internships in Canada are illegal in almost all circumstances unless it’s part of formal education program offered by a university or college. What’s more incredible is that Mr. Semple doesn’t seem to understand the role of social minima within the context of socially protective labour laws – to ensure a floor of rights is established so people have the possibility of meeting the necessities of life. A little history lesson is in order on this point: people literally gave their lives so there could be protections around provision of minimum wage, hours of work, overtime pay, and the right to a vacation.

    Unpaid internships are robbing a generation of the chance to secure their economic futures and very much has to be placed within the context of precarious work. The idea that employers should be allowed to require young workers to work for free is a terrible one given that it damages economic growth, hurts consumer spending, reduces the tax base, and places stress on the interns’ families who often pay for their expenses during the internship.

    There are also profound equality implications arising from unpaid internships. This type of employment generally targets young female workers who forego pay, EI, and CPP in the early parts of their careers and causes a rough transition from school-to-work thereby often leading to poor labour market outcomes. Unpaid internships also exacerbate class divisions in Canadian society where students from lower socio-economic backgrounds are denied opportunities to gain critical experience due to their inability to engage in unpaid labour. Finally, there are deep questions implicating the lack of intergenerational equity in formulating public policy, simply put: why have governments let unpaid internships ascend so rapidly without so much as a whimper.

    I’ll close with this quote from USSC Chief Justice Hughes in the 1937 decision in West Coast Hotel Co. v. Parrish, he states: “The exploitation of a class of workers who are in an unequal position with respect to bargaining power and are thus relatively defenseless against the denial of a living wage is not only detrimental to their health and well being, but casts a direct burden for their support upon the community.” Unpaid internships are now a serious public policy issue in the U.S., U.K., Australia, and Canada – I’m very happy to be part of a small group of activists who are winning the fight against one of the most exploitative forms of labour in the modern era.

  8. Jonathan Westphal

    Worse yet, it seems that unpaid internships may do little to increase students’ chances of getting a permanent job…

    http://www.theatlantic.com/business/archive/2013/06/do-unpaid-internships-lead-to-jobs-not-for-college-students/276959/

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