Unpaid internships- thoughts?

Our D, a college sophomore, called us Friday to tell us that after two interviews, she got an internship…far from home , and unpaid! Whoopee! We have been trying to wrap our heads around this all weekend. She would be working for a small start up, doing all kinds of things for this small start up, but yet no real job description and no $$$. The Principals in the firm are alums of her very nice college and have great resumes, and in theory, it could be great exposure to the business world. Her college does offer funds for living expenses for unpaid internships, but this came in after the deadline. I would love for her to be earning some money, but quite frankly, she worked during the year and hasn’t even spent her last summer earnings so she could self fund. I just want to make sure she isn’t being taken advantage of.Or is that the whole deal with unpaid internships…?
Thoughts, wise CC parents?

Is she getting college credit? If not, and it is not a government agency, internships should be paid.

My son will be doing an unpaid internship this summer. He is a sophomore, and he will get credit for it (but that just means instead of him getting paid, I have to pay the school). I’m happy to do it, and he is excited for the opportunity. He will be working only part time at the internship, living at home, and will probably get a part time job with pay as well.

What type of work?

For a for-profit company, she should be getting some compensation. Tiny startups might offer something like founder’s stock instead of cash (typically a very small chance of becoming valuable, but ends up being worthless for the vast majority).

If all she can find are unpaid internships, then she may want to take that as a signal that getting a paid entry level job in that line of work may be very difficult and competitive.

My daughter did an unpaid in NY her freshman summer. There were other adults working there, along with their paid jobs, dealing with the NY struggle. She was the youngest person there. Upon returning to school in the fall, she promptly switched her major lol!

I’m not a fan of unpaid internships. My D1 did a summer with that (with living expenses paid for by the college). Didn’t net her anything worthwhile on her resume.

I too don’t like unpaid internships - after freshman year my daughter volunteered at a non-profit - was a good experience for her working for the first time in an office for a real company.

Without knowing what field she is interested in and what the alternatives are, it’s hard to comment. Does she want to do it? If she’s going to get great experience and make some good contacts and she doesn’t need the money, I’d go for it.

I understand about the difficulties in accepting an unpaid internship. I recruit interns for our not-for-profit museum, and all internships are unpaid. It’s not that we wouldn’t like to; it’s simply a matter of economics.

However, since you reference a start-up business, I’m assuming this is a for-profit company. In that instance, they really should be paying something, even if it’s not a competitive wage. With no pay and no job description, it sounds like it’s potentially much less productive than working elsewhere for the summer.

I thought unpaid, non credit-earning internships in the private sector were illegal. No?

How far from home? Is it for the entire summer? Is it an internship program where she’ll be with lots of other interns or is it just her? Has she googled to see if there are any reviews of the internship experience there from previous interns? Have they given her a written job description? Will she at least get college credit? Or some sort of modest stipend?

Our D (also a sophomore) also has unpaid internship for summer - we wish it were paid, but it’s a good opportunity and she can live at home and commute. There’s been a lot in the news over past couple of years on the legality of this. A couple of cases (Black Swan) ruled that the unpaid internship was illegal. It’s still a gray area though - and seems very prevalent - even on the career job posting sites sponsored by the colleges.

The reality is that all of these internship opportunities are highly competitive - and the kids need stuff for their resumes. Unfair? Yeah - but we’re rationalizing that it’s only sophomore to junior year and she had a paying gig for the past 3 summers. From everything I’ve heard, it’s the next summer’s internship - junior going into senior year - that really, really matters - and many of those do seem to be paid. In fact, many of the bigger ones specify that you must be a rising senior.

the law on unpaid internships:

For-profit companies are only permitted to use unpaid internships if they meet six specific criteria outlined by the Department of Labor (DOL). The most important thing to remember is the unpaid internship must be for benefit of intern. If recent lawsuits in the entertainment, media, and fashion industries are any indication, there are plenty of American companies who still use unpaid interns largely for their own benefit.

And that’s illegal.

Here are the six legal requirements for unpaid internships at for-profit, private-sector companies in the U.S. The following language was taken directly from a DOL fact sheet on internship programs under the Fair Labor Standards Act (FLSA).

The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
The internship experience is for the benefit of the intern;
The intern does not displace regular employees, but works under close supervision of existing staff;
The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
The intern is not necessarily entitled to a job at the conclusion of the internship; and
The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Best to pass on unpaid internships not worth the student’s time.

Does she have any alternative?

I will offer a contrary view.

Two summers ago I was approached by a friend and former classmate about her son’s interest in my field. I created an unpaid internship for him. It was certainly more work for our company than any benefits we received, but I think her son found it very valuable.

http://www.nytimes.com/2015/07/03/business/unpaid-internships-allowed-if-they-serve-educational-purpose-court-rules.html

Thanks! You are all echoing our thoughts and concerns… here’s more info…

She’s not getting college credit and it is a for-profit, though it is being run using space at a prominent University. When I say start up, I mean start up- 3-4 people, Harvard and MIT grads. It’s in ‘FinTech’. She would be an ‘Operations intern’- working on any number of projects that will help the company grow. My daughter has good leadership/people skills and has worked mostly as a camp counselor, youth services coordinator, and now as an RA in college. She entered college as a chemistry major, but she hated a paid summer internship last summer working in a lab, so she is now a history major with no idea what to do with her life. Nothing has panned out for the summer as of yet, as she doesn’t want to spend another summer working with kids…she wants to expand her horizons and her resume.

We can afford to foot the bill, but it does go against our grain. I threw the ball back in her court last night and asked her to investigate housing and come up with an estimate of how much this will cost. And yes, I think getting stock options or something for her time would make it much more attractive…even if they turn out to be worthless(that’s the lesson!) Yes, humanities majors can have tough times getting jobs that pay!

If there are no other offers, this may be a good opportunity. I say this reluctantly. She needs to make sure she doesn’t get dumped on with a lot of office management work. The startup owners have already figured out that humanities majors are cheaper than a dime a dozen. Sounds a bit exploitive to me, and a sheer lack of respect for background and work that differ from that of the startup founders, but perhaps she can gain some new experience and outlook from it?

@nohelicopter,

So it sounds like a situation where a company with little or no money is offering your daughter, who sounds intelligent but has no relevant experience in the industry, an unpaid internship. Given her lack of options in Mid-May, I don’t think this is the worst thing in the world. It would be much worse taking an unpaid experience if she had extensive experience in the field. I think it is worthwhile for her to negotiate for stock options that will be granted upon satisfactory completion of the internship.

She may find that she really likes FinTech, or she may find she hates it. Either way she will learn something.

By the way, I work in finance. Feel free to PM me about this if you would like.

Many legitimate companies have eliminated unpaid internships because it is not legal unless they meet those 6 points mentioned up thread. Even for my humanities student (D2), I didn’t let her do unpaid internship (I didn’t spend all that money for you to go to school so you could work for someone for free).