It's widely agreed that interning during college is one of the best ways that students can find jobs after graduation. But the question about whether interns should be paid is now tied up in a lengthy legal battle.
About one-third of college interns work for free, according to Michigan State University's College Employment Research Institute.
Employer surveys conducted annually by the National Association of Colleges and Employers have repeatedly shown that college students who secure internships enjoy a significant advantage in finding jobs after graduation and also keeping their positions.
Yet internships remain controversial because these opportunities remain out of reach for many students who can't afford to move to a city like New York or Washington, D.C., to work for a semester or summer. Internships can also reduce the availability of jobs for Americans who might normally qualify for what are often low-skill positions.
A controversial federal appellate court ruling earlier this month made it more likely that a growing number of internships will become a luxury that only affluent students can afford. The ruling stopped in its tracks a flood of class actions that were challenging companies for using unpaid interns for menial work such as taking lunch orders, answering phones and filing paperwork.
Whether interns should be paid for their work attracted national attention several years ago when two former interns, who had done work in connection with a Fox Searchlight movie, sued. In seeking compensation for work connected to "Black Swan," an Oscar-winning film that generated more than $300 million dollars, the plaintiffs alleged that the movie company had violated minimum wage laws.
In 2013, a federal judge in Manhattan agreed with the former interns. In siding with the plaintiffs, Judge William H. Pauley III said they should have been classified as employees based on six stringent criteria that the U.S. Labor Department had established to determine whether interns could legally be required to work for free.
The ruling unleashed scads of lawsuits by interns who said companies were illegally enjoying free labor. Many corporations ended up settling with former interns for millions of dollars rather than slogging through litigation.
The pendulum, however, swung back toward employers in July when a three-judge panel of the Second Circuit Court of Appeals said the Labor Department criteria were too strict. The appellate judges said unpaid internships are legal as long as the intern is the "primary beneficiary" of the intern-employer relationship.
If the appellate ruling stands, class actions could be far more difficult to pursue because the appellate court said whether an intern should be paid will be a "highly individualized inquiry."
While the last chapter of this legal battle hasn't been written, what is well established is that college students should seek out internship opportunities regardless of whether they're paid positions.