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Compliance Issues Threaten Internships

U.S. Department of Labor guidelines indicate that any for-profit company with an unpaid internship not providing mutual value is probably breaking the law.

By Joyce Gioia-Herman

In response to a recent United States Department of Labor (DOL) warning about intern compensation and exploitation, the issue of unpaid internships has attracted considerable attention. The DOL subsequently issued "Fact Sheet #71: Internship Programs under the Fair Labor Standards Act" (April 2010). This document clarifies employer guidelines about what constitutes "trainee status" to qualify for a compensation exemption. The reaction has ranged from confusion to uproar.

The DOL guidelines indicate that any for-profit company with an unpaid internship not providing mutual value is probably breaking the law. To support employers, The Internship Institute (TII), an action-oriented, non-profit organization has issued a "Compliance Advisory" that summarizes the DOL’s guidelines and offers a solution. http://www.InternshipSuccess.com.

The site offers a comprehensive intern and career development training course that awards a "Certificate of Career Preparation." This certification course enables students to align their career paths, gain meaningful work experience and develop the skills to perform at their best. The course is valuable for employers, whether or not they pay their interns, because it tangibly demonstrates the company's investment in these young people.

"Interns increase talent equity. Aside from an inherent commitment to train them, the value of making them more capable, efficient, productive, loyal and motivated provides a straight line to greater return on investment. Providing a compliance remedy is secondary to being substantive and beneficial for everyone," said Matthew Zinman, founder of the Institute.

Ten percent of all course proceeds will support TII's "Unpaid Intern Compensation Fund" to make internships accessible for disadvantaged youth. For a limited time, TII has also issued a 20 percent compliance subsidy for companies to make certification more accessible. Employers – with and without paid internships – are invited to utilize the code: “COMP0610” for group registration.

At a much higher cost, the site InternBridge.com also offers support materials to employers; however, the certification program offered by the Institute is a unique solution to this challenge.

This compliance solution is an excellent example of how innovation may be applied to benefit all parties. Given the global use of interns, we at the Herman Group would not be surprised to find this valuable easy-to-implement course translated into several languages.

Herman Trend Alerts are written by Joyce Gioia, a strategic business futurist, Certified Management Consultant, author, and professional speaker. Archived editions are posted at http://www.hermangroup.com/archive.html.