Updated on 04.05.16

Is an Unpaid Internship Worth It?

Fair or not, they can help you gain experience, connections, and more.

intern doing radio interview with headphones

Unpaid internships are more prevalent in some industries than others. But is it worth working for free? Photo: Kris Krug

Unpaid internships are definitely a hot-button issue for college students and recent grads.

Ross Perlin, author of  “Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy,” estimates that of the million or so students doing internships, half aren’t being paid for their hard work. And it’s not only students, but college graduates who are also accepting unpaid internships, according to U.S. News & World Report.

Some feel very strongly that everyone, regardless of their role, deserves to be financially compensated for their work. Offering unpaid internships isn’t fair to those doing them, to the entry-level workers replaced by unpaid interns, to those who can’t afford to work for free, and even to businesses that are limiting their candidates by not offering money.

On the other hand, some feel unpaid internships are an opportunity to gain experience at a company that otherwise may not have been able to afford to offer internships. Paid or not, internships are a great way to learn skills, gain valuable work experience, build a resume, get references, and, as many hope, pave the way to a full-time job opportunity.

Here’s the good and the bad when it comes to unpaid internships, and what you need to know:

Aren’t Unpaid Internships Illegal?

That’s a great question that, unfortunately, wasn’t asked until somewhat recently. In fact, you might have heard stories about how former interns started suing companies for back pay for their work as unpaid interns. The answer to this question is a bit of a gray area, and depends on the internship itself.

The U.S. Department of Labor says your employer needs to be paying you at least minimum wage, according to The Fiscal Times. So that could make an unpaid internship illegal, right?

Well, not if the company doesn’t really consider you an employee. If you’re an intern, it can offer you a position without pay if it meets specifications. The U.S. Department of Labor’s Wage and Hour Division outlines instances where even an unpaid internship can be legal. Essentially, the internship needs to be an educational experience with more of a mentor/mentee relationship than a boss/employee one. Here are the criteria an unpaid internship needs to achieve:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment.
  2. The internship experience is for the benefit of the intern.
  3. The intern doesn’t displace regular employees, but works under close supervision of existing staff.
  4. The employer that provides the training derives no immediate advantage from the activities of the intern and on occasion its operations may be impeded.
  5. The intern isn’t necessarily entitled to a job at the conclusion of the internship.
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Drawbacks and Ethical Debate of Unpaid Internships

Unpaid internships definitely have their cons. Here are a few:

  • They just might be illegal. If your internship doesn’t match the criteria mentioned above, it could be an illegal situation. Understand what you’re signing up for before you start any internship.
  • It limits opportunity. Since not everyone can afford to work for free, even part-time, not everyone has the opportunity to pursue these types of positions. Some maintain that unpaid internships are actually “devaluing the labor force.”
  • Unpaid interns technically have fewer rights. Since they aren’t considered employees, unpaid interns aren’t protected against discrimination, harassment, or entitled to any employee benefits.
  • It may make you less employable. The National Association of Colleges and Employers recently conducted a survey that concluded that those who completed paid internships had an advantage over those who had unpaid internships. For starters, 63.1% of paid interns were offered a job after graduation, while only 37% of unpaid interns were offered a job. That figure is only slightly higher than the 35% who were offered a job with no internship experience at all.
  • It can result in a lower salary. In that same survey, those who interned at a paying position reported earning more money as well. Paid interns reported earning a median salary of $51,930 at their first jobs. Graduates who did unpaid internships earned a median of $35,721, which is less than the $37,087 median salary for those who did no internship at all. However, it should be noted that paid internships are often found in better-paying and more competitive industries, such as engineering, science, and finance, while unpaid internships are more prevalent in lower-paying fields such as fashion and communications.
  • It might hurt the economy. Of college graduates ages 21 to 24, 8.5% are unemployed and 16.8% are underemployed, according to Slate.com. Mic.com also points out that this youth unemployment crisis could be partially attributed to entry-level jobs being filled by unpaid interns while companies try to save money.
  • It isn’t helping the student debt crisis. If a student is doing an unpaid internship during college and turns to student loans to make ends meet, it’s not going to make dealing with student loans any easier after graduation. Plus, if a graduate takes an unpaid internship, they’ll probably be trying to put loans in deferment, where any subsidized loans will only get bigger as the interest accrues.
  • It’s hurting businesses that use them. While you might not care too much about how it affects a corporation, unpaid internships can have negative consequences on the businesses that use them. They might be getting work for free, but it can limit the diversity of their candidates since a large number of students can’t apply.

Benefits of an Unpaid Internship

While unpaid internships are controversial, there can still be benefits to taking one. For starters, you might get the chance to intern at a smaller company that normally wouldn’t be able to afford hiring you. Even if that is your only option to gain experience, and you’re able to work at least part-time for no pay, you should make sure there is other “compensation” being met. Here are some things your unpaid internship should be providing:

  • College credit. You need credits to graduate anyway, so why not complete them while earning work experience? Before going this route, you need to confirm that the company is willing to offer college credit, because some companies are not. You’ll also need to check with your college since there could be specific requirements that you or the company need to meet to earn credits for the internship. Finally, assuming you’re paying tuition for the credits, note that going this route means that you’ll be paying to do an internship.
  • Experience. Any internship should offer you the opportunity to learn new skills, get a feel for how an industry works, learn from current employees, and gain valuable hands-on experience that can be hard to come by in school. Open your eyes to see what you can take advantage of during your experience. For example, volunteer to help out with other tasks that interest you and learn as much as you can in the process, or look for a chance to try out new software or operating systems so you can add new skills to your resume.
  • Job prospects. While that survey indicated that those who did an unpaid internship were less likely to score a job than paid interns, there is still the case that any internship can help you land a job, whether it’s at the company you interned for or at an industry rival.
  • Networking. You’ve heard it before: It’s not what you know, it’s who you know. Those people you’re meeting at your internship – your supervisor, the employees, and even other interns – are all people you’re adding to your professional network. If these relationships go well, they can lead to reference letters for jobs, graduate school, or scholarships, or even future internships or job offers. You can also use them as references to vouch for your work experience. Not to mention, these people could help you with other professional opportunities, even if it’s not where you interned — maybe even years from now.
  • Added perks. You might find that if you’re not being paid, you may be offered other types of incentives or perks. For example, you might be able to get your transportation reimbursed or a free bus pass. Your mentor, or other employees there, might be willing to help you with course work, like offering input on projects or editing related papers. Other perks can include use of company equipment and facilities, tickets or entry to events, or free lunch or coffee.

Accepting an Unpaid Internship

  • Know what’s expected of you. Before you sign on, you should have a clear picture of what you’ll be doing and what’s expected of you. If you’re juggling classes, a part-time job, and still trying to fit in this internship, you need to know what the time constraints are. Plus, if your role is grabbing coffee and taking lunch orders, you might not feel it’s worth your time.
  • Convey what you expect from them. Know what you want out of this internship. What are you looking to learn? What do you want to gain from this experience? Be certain the company and the position can provide these things for you.
  • Check with your school. If you’re doing the internship for credit, you need to check with your school. First, you need to see if it is even an option for credit. Don’t just assume that it will count toward your degree. Second, understand what the requirements are to get that credit. You might need to turn in a paper at the end describing your experience, get an evaluation from a supervisor or mentor, or give a presentation on your experience. You should know this prior to accepting the offer so you can prepare for it.

Other Options

Okay, so you can’t find a paid internship, can’t afford to do an unpaid internship, but still need relevant work experience on your resume? Here are a few options:

Part-time job. Find a part-time job that can offer something beneficial toward your career aspirations to take the place of an internship. While you aren’t going to find the same job you’ll be looking for once you graduate, you can try to find something that can get you closer to that goal. You can do this either by the job function or the job location.

Take journalism or marketing, for example. At your current part-time job, you can offer to take on managing the company’s social media accounts since most businesses, from retail to restaurants, can benefit from a social media presence. You’ll enhance your skill set and still get paid for it at the same time.

Or you could try to get a foothold at the actual company where you’d like to start your career. Keep an eye out for part-time positions that may not require a degree, such as administrative assistant, mail room associate, or even child care aide if they have on-site daycare for employees. While it’s not your ideal career path, it’s a foot in the door — and a paid one, at that — that can help you make your case for an entry-level position once you graduate. You’ll be a familiar face with knowledge of how the company operates, and if you form relationships with company employees, they can be helpful references and advocates when a position opens up in your field.

Freelancing. You can get paid gigs doing freelance or consulting work if you have the talent. Upwork.com offers positions for marketers, programmers, mobile developers, designers, and writers. Freelancer.com has postings for legal positions, event planning, business plans, financial analysis, trades, branding and advertising, and so much more. Every small job you complete will give you more experience, and add one more reference to your professional network.

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