The Beginning of the End of the Unpaid Internship

Read more: Internships: The Beginning of the End of Interns Without Wages |



By Josh Sanburn

In August 2011, when Diana Wang began her seventh unpaid internship, this time at Harper’s Bazaar, the legendary high-end fashion magazine, she figured that her previous six internships – at a modeling agency, a PR firm, a jewelry designer, a magazine, an art gallery and a state governor’s office – had prepared her for the demands of New York’s fashion world.

“I was so determined to make this one really worth my while,” says the 28-year-old Wang, who moved from Columbus, Ohio, to New York, where she was living with her boyfriend (also working as an unpaid intern at one point) and living off of her savings. “I knew I couldn’t do anymore internships after this.”

As it turned out, Wang’s internship was just like many of the thousands of others: unrewarding in terms of both pay and marketable experience — not to mention the lack of a job offer. In fact, the only difference between her internship and most others was what happened about a month after it ended. Wang sued.

On Feb. 1, the law firm Outten & Golden filed a class-action lawsuit against the Hearst Corporation, which owns Harper’s Bazaar, on behalf of Wang and any other unpaid and underpaid intern who worked at the company over the past six years. The lawsuit alleges that, among other things, Hearst violated federal and state labor laws by having Wang work as many as 55 hours a week without compensation.

(MORE: 6 Common Misconceptions About Financial Aid)

“It was disgusting,” says Wang, referring to her unpaid daily responsibilities like shipping hats between New York and London for $350 each way, not being able to eat lunch until 4 p.m., routinely shuttling heavy bags around Manhattan and working to 10 p.m. with no break for dinner – all while supervising eight other interns. “Thinking of the spring interns who would come in with high hopes just like my fellow interns and I had — I decided that someone had to put a stop to this practice, which was going to go on forever and get worse before it got better.”

Hearst declined to respond to the specific accusations made by Wang because of pending litigation, but the company did release a statement: “The internship programs at each of our magazines are designed to enhance the educational experience of students who are receiving academic credit for their participation, and are otherwise fully in compliance with applicable laws. We intend to vigorously defend this matter.” (Time Inc.’s policy is to pay interns. Limited exceptions may be made where appropriate, such as when a student is receiving academic credit and meets other requirements as well.)

In the workplace, there seem to be two long-established but contradictory rules: Everyone gets paid to work – unless there’s mindless drivel to do, of course, and then you get college kids to do it for free.

For decades, that seemed just fine. But that was before a couple of interns sued Fox Searchlight in September after they were tasked with the responsibilities of production assistants, bookkeepers, secretaries and janitors without wages. This wasn’t mindless coffee-fetching, they argued. These were entry-level positions that were being filled by unpaid hands. Thanks to the struggling economy, companies were now relying on interns to do entry-level work without having to pay them wages or benefits.

That lawsuit prompted other unpaid interns to sue, including Wang and an intern who took legal action against PBS’s “The Charlie Rose Show” in March.

As college students make the annual rite of passage from college classroom to summer internship, those unpaid positions may have finally peaked. Says Ross Perlin, author of Intern Nation: “I think we may be at the very early stages of a significant backlash against an internship phenomenon that has gone off the rails.”

Internship or Internment?

The very first interns weren’t carrying luggage around New York City. Instead, they were anesthetizing, bloodletting and vaccinating. Between the mid-1800s and World War II, interns were only found in hospitals. Medicine was considered a unique field that could only be learned through observing and hands-on practice. Those internships are now the medical field’s modern-day residencies.

Around the 1930s, education and business leaders started advocating for a more seamless transition from school to the workplace in areas other than medicine. Internships began spreading into other fields, first in public administration and later publishing, marketing and banking.

As more internships sprouted across the country, Congress passed a number of laws regulating them, including the Fair Labor Standards Act of 1938, which specifically lays out a 6-point test, still in use today, for hiring unpaid interns:

1. The internship must be similar to training that would be given in an educational environment; 2. The internship must be for the benefit of the intern; 3. The intern does not displace regular employees; 4. The employer derives no immediate advantage from the intern; 5. The intern is not entitled to a job at the end of the internship; and 6. The intern understands that he or she is not entitled to wages.

(MORE: Is Forgiving Student Loan Debt a Good Idea?)

The real intern boom didn’t occur until the 1970s and 1980s. That’s when two big shifts occurred, says Perlin. The first was a move from the traditional norm of holding on to one job and working there your entire life to multiple forms of “contingent labor.” It’s what sociologist Andrew Ross has called the “casualization” of the U.S. labor force. Employers soon realized the benefits of part-time employees, independent contractors and temporary workers. By hiring contingent workers, employers could pay less in benefits, prevent workers’ attempts to unionize and initiate layoffs much more easily. That was coupled with the proliferation of Human Resource departments, which are now often solely responsible for hiring and bringing in new employees, many of whom often begin as interns through a company’s internship program.

Even before the financial collapse around 2007 and 2008, internships – both paid and unpaid – were increasing. The National Association of Colleges and Employers reported that 50% of college grads in 2008 had held an internship, compared with 17% in 1992. But the Great Recession accelerated that boom. Today, an estimated one-third to one-half of the 1.5 million internships in the U.S. are unpaid.

“More and more people after they graduate are feeling they have no choice but to take on unpaid internships,” says Perlin. “It’s something that you have to do three, four, five times potentially to break into an industry or to get any kind of paying work. It may even be something you do in your 30s or 40s.”

The Intern as Entry-Level Employee

No need to tell Eric Glatt that. Twenty years ago he began teaching English as a foreign language, then went back to school to get an MBA, which landed him a job with an insurance broker in Midtown Manhattan. But he always wanted to work in movies, so he started taking film classes at night and began working on a couple documentary projects – one paid, one unpaid. After a brief stint with insurance giant AIG and a run-in with the financial crisis, he thought he’d give the film thing one more shot.

At 40, Glatt was hired by Fox Searchlight as an unpaid intern on the set of the Oscar-nominated movie Black Swan. Because of his business background, Glatt was sent to the accounting department, where he carried around petty cash, filed receipts and made sure checks were signed. Initially, his job wasn’t labeled “intern.” It was “accounting clerk.”

During his internship, Glatt says he started doing some research about whether his internship was legal – and that got him thinking.

“I weighed my options for quite some time,” Glatt says. “I remember reading an article saying that unpaid internships were a lawsuit waiting to happen. I realized after a while, I’m that lawsuit.”

Fox Searchlight declined to comment on the specifics of Glatt’s allegations but issued a statement through a company representative: “It is clear that these are meritless claims aimed solely at getting press coverage for the litigants and their attorneys. Fox Searchlight internships comply with all federal and state laws and regulations, by paying required wages or complementing the individual’s academic studies in for-credit programs, while also providing them valuable ‘real world’ business experience. We look forward to aggressively fighting these groundless, opportunistic accusations.”

(MORE: Why Can’t You Discharge Student Loans in Bankruptcy?)

Fox and others seem to argue that they can get around not paying interns by offering college credit, but Glatt says he wasn’t enrolled in school at the time, and to the best of his knowledge, neither were any of the other dozen or so unpaid interns.

“They were counting on the fact that nobody would sue,” says Glatt, “particularly kids who are out of school. This culture of expecting to be able to get free labor if you slap the title intern on it has become so pervasive that people don’t question whether it’s ethically wrong or legally acceptable.”

The Influence of Occupy

Something else was happening when Glatt was considering legal action: Occupy Wall Street. The downward mobility of young people was part of the overall language of Occupy, and unpaid internships fit perfectly into that narrative.

“Unpaid internships have been talked about for the first time as a political issue in this country,” Perlin says. “There’s more awareness of the law, and these lawsuits are helping that.”

While intern lawsuits aren’t unprecedented – there was a prominent lawsuit against an Atlanta public relations firm in the 1990s – there have been next to none, likely because former interns are worried that they’ll be ostracized in an industry in which they’re trying to work. Besides, even a successful settlement isn’t going to get them much money.

“There’s still a big fear factor for interns about stepping forward and putting themselves on the line, risking potentially being blacklisted within an industry or within a firm,” Perlin says. “It’s a big thing to come out for not that much money. The back wages at stake are maybe several thousand dollars.”

Alex Footman, another former Fox Searchlight intern who filed the lawsuit along with Glatt, says he worries about how others in the film industry will treat him now.

“I realize that I have made a decision that could prevent me from being hired in the future,” Footman says.

Read more: Internships: The Beginning of the End of Interns Without Wages |

After Wang heard about Glatt and Footman’s lawsuit, she was encouraged to take legal action against Hearst. Then in March, another intern sued, this time a 25-year-old film student named Lucy Bickerton, who interned at “The Charlie Rose Show.”

“It’s so ingrained, especially in the film industry, that you pay your dues,” Bickerton says.“You keep your mouth shut and are thankful for anything that comes your way.”

Bickerton says so many college students entering the workforce think internships will automatically lead to jobs. But nobody questions whether those interns should actually be getting wages.

“Nobody ever told me, ‘Don’t you think your time is worth getting paid for?” Bickerton says.

Yvette Vega, executive producer for “The Charlie Rose Show” also offered a statement refuting the accusations: “We are confident that our practices are in accordance with applicable law and provide a valuable education experience for interns.”

Before the trio of lawsuits, the Department of Labor announced that it was cracking down on unpaid internships by ramping up efforts to educate future interns about their rights and informing employers about federal law. But the best way for the department to take action is through complaints directly from interns — and that rarely happens.

But some employers have already started changing their internship policies, including magazine publisher Conde Nast, while others are beginning to rotate interns through different departments, which appears to offer them a more educational experience and makes it harder to assign menial but essential tasks. While it’s difficult to predict, the threat of legal action may mean fewer unpaid internships offered this summer than in recent memory.

For Wang, she says her internship at Harper’s Bazaar convinced her that rather than educating and training them, businesses will use interns any way they can simply to improve their bottom line.

“I always wanted to intern in New York in the fashion industry. But I had blown through all my savings to work for this major magazine so they could meet their budget,” says Wang. “That’s why I did what I did. I didn’t know another way to raise a flag about what was happening.”

A couple weeks ago, Wang was laid off from a new job at a web start-up. She’s moving back to Columbus.

Read more: Internships: The Beginning of the End of Interns Without Wages |