Unpaid Equals Unfair? The Law, Economics and Ethics of Unpaid Internships

ILO Washington Director Nancy Donaldson participated on a panel of experts at a discussion at Georgetown University on Monday, March 18th, 2013.

ILO Washington Director Nancy Donaldson participated on a panel of experts at a discussion at Georgetown University on Monday, March 18th, 2013. The event, which was sponsored by the Kalmanovitz Initiative and the Georgetown Solidarity Committee, brought leaders from the economic and labor fields together with students to discuss the economic ramifications and labor rights issues of unpaid internships in the U.S.

Donaldson highlighted the current context of the youth unemployment crisis worldwide. According to the ILO, there are over 1.2 billion unemployed youth in the world, and they make up 40% of unemployment across the globe.

“Because of the youth unemployment crisis, internships—both paid and unpaid—are likely to continue to be in demand as a way to break into the labor market,” she said.

The panelists addressed several dimensions on the question of whether unpaid internships are fair from a labor rights perspective or serve to prepare future workers for the new workplace.

In the U.S., internships are regulated by the U.S. Department of Labor under the Fair Labor Standards Act. For the private industry, companies that offer internships are expected to pay interns, and unpaid internships require a large training component and that the intern doesn’t displace any regular employees. A surge of recent class action lawsuits demonstrates concern that there is systematic abuse of the law in some sectors.

While the Fair Labor Standards Act does allow for unpaid internships for non-profits or the public sector, many argue that unpaid internships are exploiting students.

With regard to the ILO’s position on internships, Donaldson stressed that they can be beneficial.

“The ILO believes all companies and organizations that offer internships should follow the laws set out to govern them. Internships, even unpaid ones, when conducted in the proper manner—that means they have a heavy training component and they further the intern’s skill set—can be an important career builder,” she said.

“Still, our view is that interns should be paid and should be supported and trained as valuable members of the workplace team.”