For centuries, not-for-profit organizations have relied on services performed by volunteers. For decades, services also have been provided by unpaid interns. In the private, for-profit sector, however, the issue of unpaid workers has generated controversy and spawned lawsuits. Indeed, although the U.S. Department of Labor (DOL) may be starting to take a more relaxed approach toward the prosecution of companies using unpaid interns, in early 2012 several entertainment industry employers were hit with wage-and-hour class actions challenging the status of unpaid internships and whether the individuals at issue should have instead been classified as employees and paid wages.
Now more than ever, businesses in the United States are seeking to reduce costs and increase operational efficiency. Many employers are turning to alternative approaches to business, including exploring the use of interns, and new graduates are looking at internships to obtain experience and gain a competitive edge in the current job market. A 2008 study by the National Association of Colleges and Employers estimated that approximately 50 percent of graduates participated in internships, up from 17 percent in a 1992 study by Northwestern University. Steven Greenhouse, “The Unpaid Intern, Legal or Not,” N.Y. Times, April 2, 2010.
