Are Unpaid Internships Ethical? Exploitative?


On our last The Answer Zone – no BS career advice we tackled a very hot topic: unpaid internships. Joining us to discuss this important issue were Mark Babbitt, founder of YouTern and a leadership and career mentor, and Jennie Mustafa-Julock, aka Coach Jennie, The Audacity Coach.

We got right to the point with a yes or no question: Are unpaid internships unethical? Exploitative?

I turned to Coach Jennie first, who had trouble with the very strong words we used in our line of questioning. She acknowledged the idea that a large percentage of internships have been unpaid for a long time and they clearly favor the privileged. Growing up underprivileged, Jennie could not afford to take an unpaid internship because she had to work to survive, and that really hit her hard in her chosen field. Yet, she was unwilling to commit to the word “exploitative” because there are grey areas.

Where Does the Law Stand on Unpaid Internships?

Unpaid internships are only legal if they follow the Department of Labor’ 6 pronged guidelines. Number 4 on that list is “the employer cannot benefit from the work of the intern.” Mark pointed out it is difficult to imagine an instance when the employer doesn’t benefit. So, one could assume there wouldn’t be many instances where an unpaid internship was legal, right?

Not so fast. Last summer the United States Court of Appeals for the Second Circuit vacated a 2013 decision on a lawsuit brought against Fox Studios by interns on the movie “Black Swan.” The ruling called the Labor Department’s criteria “out of date” and “not binding on federal courts.”

Judge John M. Walker argued that a worker’s status could be determined by a “primary beneficiary test.” This concept, created by Fox (the defendant), proposed that an unpaid internship was lawful if the intern benefited more from the relationship than the employer. Judge Walker argued that the test,

“… should hinge largely on the internship’s educational benefits: for example, whether the internship was tied to the intern’s formal schooling and whether it occurred in an educational setting.”

This boils down to the fact that interns will have a difficult time bringing suit against an employer. Mark Babbitt, known for his no nonsense style, sums up our take on this subject:

“If you are a for-profit company and you are making money, there is no frigging excuse for not paying your interns. Period. Now if you’re a non-profit or a 100 percent volunteer organization, it’s different.”

How can immensely profitable companies like Northwestern Financial, Google, and The New York Times Corporation ever justify not paying for work done?

When is an Unpaid Internship OK?

If you search our blog you will find posts YouTern focused on making the best use of unpaid internships. We have heard thousands of stories of people whose careers were transformed by unpaid internships. We have a very difficult time saying categorically that every single instance of unpaid internships is wrong.

For instance, being compensated with course credits can be incredibly beneficial because you get something in return, along with on-the-job training. There are also temp-to-hire internships where you learn a trade, apply to get hired and often get the job. There are indeed cases where it can be extremely beneficial to the unpaid intern. The onus is on the intern to watch for the red when considering an internship. For instance, do you have a boss/supervisor or do you have a mentor? If you can look at the person sitting across from you and say “this individual cares nothing for me, my career or my future,” that is a bad internship.

An internship is supposed to be a learning environment that helps the individual grow within their career choice. Or, it can be used as a litmus test for your career choice, and you may discover you made a mistake and need to change career paths. It’s much better to discover these choices early in life.

What Responsibility Rests with the Intern?

The intern needs to understand that ensuring a solid internship means they need to take responsibility. If you take an internship and didn’t ask to meet your supervisor, you need to own that. Now, there are instances of extenuating circumstances where it’s not possible for you to meet your supervisor. There are, however, other indicators that you can watch for. Here are some additional red flags:

  • The job description is so vague you have no idea what you’ll actually be doing.
  • A job with too much independent work; you need to interact with others so you can learn and hopefully build mentorship relationships.
  • It is clear that you won’t get a seat at the table; being excluded from meetings and company gatherings.
  • Does the internship align with what you’re trying to do? Will you learn the hard and soft skills you need?

If you do discover, too late, that you’ve made a mistake, the good news is it’s usually only a 6 – 8 week assignment. You should try to manage your internship, and this is why you need a learning plan from the outset that lays out what you want to learn during the internship. By doing this you can refer back to the plan if the internship doesn’t meet your expectations. You need to manage and co-manage your internship, paid or unpaid.

Why is it Important to have Internships?

You need two, three – maybe even five internships on your resume by the time you begin your career after graduation. You can’t even get a great internship without two or three solid internships behind you; internships have become the new entry level job. Anyone still living “the big lie,” that great grades alone will get you a good job, is in for a big awakening. You need to show leadership and ownership of your life.

There are alternatives to unpaid internships. You can seek out an apprenticeship, a paid job, or a great volunteer position.

What’s the Difference between Volunteering and Interning?

If you can get a position with someone willing to mentor you and you can learn, it may make sense to volunteer. Mark pointed out that as an entrepreneur he sometimes writes and speaks for free, because he is doing it for lead generation and to earn clients. What he doesn’t appreciate is companies that expect him to work for free.

The Takeaways

It’s clear there is no black and white answer to our original question, and you need to make a decision for your own personal situation. Unpaid internships in themselves aren’t necessarily exploitative; companies that abuse them are. There is always some sort of compensation that can be forthcoming.

Sadly, over the past decade we’ve reached what Mark calls “the perfect storm”. The economy and the recession, terrible levels of unemployment and underemployment, a failing education system and weakness in soft skills among Millennials have created an extremely difficult challenge for young career-focused people.

Young people who’ve never been allowed to fail and are inexperienced at negotiating are ripe for abuse under the auspices of internships. But you can’t be a victim. You need a plan, and you need mini plans for specific circumstances. You also need to understand things change swiftly, and planning out your entire career may not work. Independence, self management and refusal to accept the unpaid internships that don’t benefit you are the answer.  

In the end it’s up to all of us. We have to manage our lives. We have to be the CEOs of our careers.

Join us for the next episode of The Answer Zone on January 14th at 12:30 pm PST / 3:30 pm EST on blab, where we’ll tackle Apprenticeships versus Internships. Why you need to know the difference.


Full video:


This entry was posted in Internships, The Answer Zone and tagged , . Bookmark the permalink.