Fewer Unpaid Internships to Be Offered

As summer intern season draws near, many employers are doing away with unpaid internships or converting them to paid programs amid lawsuits that claim interns should have been compensated for their work, labor lawyers say.

"They're saying, 'We're not going to run the risk,' " says Al Robinson, a Washington, D.C., lawyer and former acting administrator of the Labor Department's wage and hour unit.

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Unpaid internships are legal only if they meet stringent Labor Department criteria. For example, programs must provide training and benefit interns, not employers. Some firms are modifying programs by rotating interns among several departments, says lawyer Brian Dixon of Littler Mendelson.

During and after the recession , unpaid internships spread as employers faced tight budgets, says Ross Perlin, author of 2011's “Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy.” And laid-off workers were eager to fill gaps on their résumés. But the set-ups encourage employers to replace low-level employees with unpaid students, says Ross Eisenbrey of the Economic Policy Institute.

There are about 1.5 million internships in the U.S. each year, nearly half unpaid, Perlin says. In 2010, the Labor Department outlined criteria they must meet. That led many employers to re-evaluate their internships. Such reviews have intensified with the filing of two class-action lawsuits, Robinson says.

Last month, Xuedan Wang, an unpaid intern at Harper's Bazaar in 2011, sued parent Hearst, saying she shuttled fashion samples between the magazine and vendors, among other menial tasks. "This is the kind of work that's done by a (paid) fashion assistant," Wang, 28, said in an interview.

Hearst says its programs "are designed to enhance the educational experience of students," who get academic credit.

In a lawsuit against Fox Searchlight Pictures last September, two interns on the film “Black Swan” said they tracked purchase orders, petty cash, and other paperwork. Fox spokesman Russell Nelson says the plaintiffs interned for the film's production company, not Fox.

Lawyer Elizabeth Wagoner of Outten & Golden, which filed the two lawsuits, says such internships favor those who can afford to work for free.

But Michael Aitken of the Society for Human Resource Management says an overreaction by employers could doom legitimate internships. "That's a lost opportunity for students," he says.

This story first appeared in USA Today.