The Ethics of Unpaid Internships

When are unpaid internships legal?

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Some universities don't support internships that aren't paid. While Florida International University's College of Business Administration doesn't go that far, associate director of career management services John Nykolaiszyn says he does encourage employers to offer a paycheck if their internship doesn't meet Labor Department guidelines. Having paid opportunities is particularly important for students who work to support themselves while earning a degree, he says, and many of his students fall into that category. "They're working full time. They're going to school full time," he says. "They're hustling. They can't afford to [work for free]."

[See Why New Graduates Should Consider Entrepreneurship.]

And yet, Nykolaiszyn acknowledges that it's easy for companies to skirt around the Labor Department's guidelines. "[The guidelines are] confusing," he says, especially the fourth point that prohibits the employer from gaining immediate advantage from the intern's contribution. "If you ... have an intern, of course [you] want to benefit from their work."

Of 20,000 graduating seniors who participated in a recent survey by National Association of Colleges and Employers, more than half held an internship sometime during their college career, and half of those internships were paid. About 60 percent of students who did a paid internship in the for-profit sector received a job offer by graduation, while only 38 percent of students who'd participated in an unpaid internship in that sector had an offer by then.