By Bill MacKenzie
Ahhh, it’s summertime in the city, with baseball, concerts in the park, day camps, outdoor festivals … and unpaid interns.
Eager young interns are plugging away this summer at businesses across Hillsboro, learning about the world of work. Some are being paid, but others are working for free.
The Hillsboro Hops baseball team, for example, has five interns working for them. On game and non-game days they do such things as promotional work, helping with preparations for entertainment during the games, assisting front-office employees and taking ticket orders. Some of the interns are getting college credit for their work.
But none of them are being paid. Not one thin dime. Not one red cent.
Come on now. Legal issues aside, do you really think the Hops, operating in a $15.6 million ballpark subsidized by the city, can’t afford it?
It’s a good thing the Hops and other local businesses are offering internship opportunities to young people, but they are treading on thin ice by not paying them.
Federal law is clear that most interns should be paid at least the minimum wage plus overtime after 40 hours a week. Under the Fair Labor Standards Act(FLSA), covered and non-exempt individuals who are “suffered or permitted” to work must be compensated for the services they perform for an employer. According to the U.S. Department of Labor, internships in the “for-profit” private sector will most often be viewed as employment.
In June, federal District Court Judge William H. Pauley III of New York ruled that Fox Searchlight Pictures broke the law when it didn’t pay production interns working on the movie “Black Swan” because they were essentially regular employees. “Searchlight received the benefits of their unpaid work, which otherwise would have required paid employees,” the judge said.
Pauley said unpaid internships should be permitted only in very limited circumstances. He added that whether an intern is receiving college credit for the work matters little in determining whether an intern should be paid.
Pauley’s ruling isn’t a departure from precedent. There’ve been other cases, too, in which courts have ruled that interns must be paid.
You’d think companies would have learned by now and stopped trying to get free labor from interns, but many persist.
“In some industries, especially media, the unpaid internship is the risk many companies are willing to take,” Ed Reeves, a labor and employment attorney atStoel Rives LLP, told me. “Less so in other businesses. We counsel against that risk, but not every company asks.”
Some businesses that bring on interns without paying them may think it’s enough that they get experience, do some networking and get to hang around the fascinating people who do the “real work.”
But aside from the legal issues, that means students from well-off families can afford to take a career-building unpaid internship, but not the kid from an average family struggling to deal with potentially crippling college loan debt. That perpetuates inequality.
Fortunately, there are local models to copy. All the 259 interns placed so far this year by Beaverton-based Business Education Compact (BEC), are paid, according to Darrin Marks, BEC’s director of student services. There are varying rates based on their education level as well as what the company that places them would like to start them out at. Typical rates are $10 an hour for high school students and $12 to $14 an hour for college students.
Paid internships tend to pay off more for students too. According to the National Association of Colleges & Employers, class of 2013 graduates who had done paid internships outpaced their unpaid peers in job offers and salaries.
Among 2013 graduates who had applied for a job, those who took part in paid internships enjoyed a distinct advantage over their peers who undertook an unpaid experience or who didn’t do an internship.
An association survey showed that 63.1 percent of paid interns received at least one job offer. In comparison, only 37 percent of unpaid interns got an offer; that’s not much better than results for those with no internship — 35.2 percent received at least one job offer.
In terms of starting salary, too, paid interns did significantly better than other job applicants: The median starting salary for new grads with paid internship experience was $51,930 — far outdistancing their counterparts with an unpaid internship ($35,721) or no internship experience ($37,087).
So what should local businesses offering internships do? First, check with an attorney and/or the Oregon Bureau of Labor & Industries for guidance. Then do the right thing: Pay your interns. You’ll both be the better for it.
Bill MacKenzie is a former congressional staff member, newspaper reporter and communications manager for a Hillsboro company.
Originally published in the Hillsboro Tribune, Aug. 12, 2013