Unpaid summer internships gaining popularity at small firms
Summer is the peak season for educational internships of all kinds — paid and unpaid. For small businesses, the unpaid ones are gaining in popularity.
Designer Raven Kauffman, owner of Raven Kauffman Couture in downtown Los Angeles, is seeking an unpaid intern, her first time offering a formal summer internship since launching the high-end handbag business almost three years ago.
“I believe in offering internships because I was an intern,” said Kauffman, who updated Rolodexes, made coffee and learned the business as an intern in the mid-1990s. She said she will sign off on college credit forms and will offer the learning experience and close supervision that an unpaid internship requires.
“I really want to teach someone something, to mentor someone,” she said, “because it really worked for me.”
But pitfalls lurk for both students and the places they work when it comes to unpaid internships. Even well-meaning small-business owners can run afoul of labor laws regarding these temporary positions.
Federal and state wage-and-hour regulations typically govern internships. And, while enforcement of these rules has not been a priority for state and federal labor officials, there has been some new attention directed to this topic in recent weeks.
David Balter, acting chief counsel at California’s Division of Labor Standards Enforcement, said, “We are well aware that there are a lot of abuses of internship programs where it’s not really being done to provide a skill or benefit to the intern, but is basically being done for cheap or free labor.”
Many small-business owners know that unpaid internships should offer training and supervision. Most, though, are unaware of the six criteria the Labor Department highlighted as guidelines for for-profit companies in April. These can be found on the Internet at
Basically, those criteria say training must be similar to that given in an educational environment and must be for the benefit of the intern. The interns must not displace other workers and must be closely supervised.
The employer can derive no immediate advantage from the interns or their work, and on occasion the employer’s operation may be impeded. The participant is not necessarily entitled to a job at the end of the internship, and the employer and the intern must understand that there will be no pay involved.
Unpaid internships have often been the norm in Los Angeles’ entertainment and fashion industries, and the practice has been spreading.
A May survey of 305 college career-center professionals nationwide by Internships.com of Burbank reported that 68% have seen an increase in unpaid internship postings in the last academic year compared with the prior year. In contrast, only about 30% have seen an increase in paid internships.
In the survey, 41% said a lack of clarity about how to comply with the Labor Department’s internship guidelines has been a disincentive for participation by small and medium-size firms.
Vision Films Inc., an eight-employee film distribution company in Sherman Oaks, is careful in the way it treats interns, according to managing director Lise Romanoff. “We can’t treat them like an employee,” she said. “We are using them in a complementary way.”
The film distributor recently brought on Ravinder Kaur, 27, to fill one of its four unpaid internships. A film student from Singapore, she gets a gas allowance and free lunches.
“We are here for the experience and to absorb as much as we can to bring back to Singapore and to contribute to the entertainment industry there,” said the college senior, who saved and borrowed a total of $9,000 to cover her expenses during the summer.
No one tracks the total number of unpaid internships, which critics have attacked as an unfair advantage for wealthy youths. But experts said internships overall are on the rise and are now almost a mandatory step on many career paths.
Some 70% of the undergraduate class of 2010 at USC had internships before graduation, up from 59% in 2007, said Eileen Kohan, executive director of the USC Career Planning & Placement Center.
