In a competitive job market, students and recent college graduates seek out unpaid internships as a way to obtain “real world” experience they cannot get in the classroom and to open doors to desired professions. Often, these are occupational settings where the chance to work in the field can substitute for the “insider” credentials that often determine who gets hired. For companies with budgetary constraints, unpaid internships can provide an opportunity to identify potential “talent” without incurring the expenses associated with adding to their head-count of employees.
There are of, course, labor law issuesmost importantly, claims under the Fair Labor Standards Act (FLSA) and its state law counterpartsthat employers with unpaid internship programs will need to address.
