The New York Times recently reported on the legal issues involving unpaid internships. The article The Unpaid Intern, Legal or Not cites government officials as stating that labor law violations stemming from unpaid internships are "widespread." A key excerpt from the article is:
The [U.S.] Labor Department says it is cracking down on firms that fail to pay interns properly and expanding efforts to educate companies, colleges and students on the law regarding internships.
“If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law,” said Nancy J. Leppink, the acting director of the department’s wage and hour division.
Ms. Leppink said many employers failed to pay even though their internships did not comply with the six federal legal criteria that must be satisfied for internships to be unpaid. Among those criteria are that the internship should be similar to the training given in a vocational school or academic institution, that the intern does not displace regular paid workers and that the employer “derives no immediate advantage” from the intern’s activities — in other words, it’s largely a benevolent contribution to the intern.
The article also cites reports indicating an increasing number of unpaid internships and includes comments from multiple constituencies involved in this issue, including students, college officials, employers, and government officials.