Commentary | Education

EPI responds to university presidents on internship regulations

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On April 28, 13 university presidents sent a letter to U.S. Labor Secretary Hilda Solis, urging the Department of Labor not to regulate student internships. In response, EPI Vice President Ross Eisenbrey wrote to Secretary Solis, noting that regulations covering internships already exist, and explaining why regulation is important in protecting student interns from exploitation.

May 5, 2010

The Hon. Hilda L. Solis
Secretary, U.S. Department of Labor
200 Constitution Ave., NW
Washington, D.C. 20210

Dear Secretary Solis:

The April 28 letter addressed to you from 13 university presidents about the Department of Labor’s enforcement of the minimum wage and overtime law displays a nearly complete misunderstanding of the law the Department enforces. The letter closes with an astonishing request: “that the Department of Labor reconsider undertaking the regulation of internships.”

This request is astonishing because, as you know, the Department of Labor has regulated internships as long as they have existed, insofar as internships are, in fact, employment. The Department has not proposed any change in its regulation but has merely sent a reminder to employers and employees that the law, the Fair Labor Standards Act of 1938, must be followed, along with guidance to help them comply.

What the law requires is, in one sense, very simple — that employers pay at least the minimum wage to employees whom they employ. This is as true for students as for other trainees, and has been the law for more than 70 years. When an internship is not employment, but is truly an educational experience for the benefit of the intern rather than for the economic benefit of the company, there is no requirement that the intern be paid.

But not all internships meet this test of educational benefit. Many so-called internships are nothing more than summer employment under a fancy name. Students go to work packing boxes, running errands, answering phones, doing filing and performing many other tasks that are of immediate benefit to the employer but have no real educational value. Even if such so-called internships are arranged through a college placement office, if the employer is not a government or a non-profit charitable organization, the “intern” must be paid for his or her work.

There is a good reason why internships must be paid when they fail this basic test. Otherwise, what’s to stop employers from simply replacing regular paid employees with unpaid student workers? Particularly at a time of high unemployment, we have an obligation to guard vigilantly against employer practices that would seek to reduce labor costs by replacing paid employment with unpaid, illegal internships.

Universities can find themselves in a conflict of interest when the student “intern” is paying for college credits while placed off-campus in a private business. The university is spared the expense of providing a classroom, a teacher, security and counseling services, and might be less careful about ensuring that a quality educational experience is taking place. I have talked to students whose for-credit internships involved far more grunt work than education. Is that the kind of exploitation the universities are seeking to shield from Department of Labor enforcement and regulation?

The National Association of Colleges and Employers reports that more than three-quarters of employers responding to a recent survey “said they prefer candidates with the kind of relevant work experience gained through an internship.” It would be unfair — both to American workers and to low- and moderate-income students who can’t afford to take unpaid internships — to leave this important first career step unregulated. It would also be against the law.

Ultimately, what the universities are asking is that the Department of Labor look the other way and condone violations of the law, when they ought to be working closely with you to ensure that their students are protected by regulations that are vigorously enforced. I trust that you will not yield to the universities’ self-serving request.

Sincerely,

Ross Eisenbrey
Vice President
Economic Policy Institute


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