Paying A Fee To Work For Free: Pricey Intern Placement Services Raise Eyebrows Among Fair Wage Advocates

How much would you pay to work for free? If that seems like an odd question, you might be interested to know that some students are paying big bucks to secure unpaid internships in major cities like Los Angeles, London and New York through for-profit intern-placement services. Companies like Global Placement and Dream Careers Inc. boast thousands of opportunities for students looking to break into almost any industry -- from film and fashion to advertising and accounting.

But the services will cost you: A Dream Careers summer internship program in New York City runs north of $10,000. That includes housing, meals and networking events, in addition to matchmaking services that purport to pair up the right intern with the right opportunity. It’s not a new concept -- Dream Careers has been around for 15 years -- but it’s come under greater scrutiny as questions surrounding the legality of unpaid internships have increased in recent years.

As wage lawsuits against companies like Fox Searchlight, Hearst Corp. and Condé Nast proliferate, so too have fair-pay movements on college campuses across the country. Today, some students weaned on the idea that unpaid work is inherently unfair see the notion of a pricey intern-placement service as absurd on its face.

“It seems almost like an Onion article,” said Christina Isnardi, a student labor advocate at New York University. “I obviously disagree with their practice of requiring interns to pay tens of thousands to intern for free.”

Eric Normington, the chief executive of Dream Careers, defends the operation with vigor and says the company provides not just internships but “experiences” -- the chance to live in a hub city for a few months, gain experience in a competitive field, and network with other students and professionals. Speaking with International Business Times on Wednesday, Normington said 85 percent of the students who sign up for the summer program say during follow-up surveys that it was “the best summer of their lives.”

But just because an internship is fun, does that mean it’s legal? Labor law experts aren’t so sure. “I think the twist here is, what if these companies are facilitating the placement of internships that end up violating the Fair Labor Standards Act?” said David Yamada, a law professor at Suffolk University Law School and director of the New Workplace Institute.

In an attempt to clear up some of the legal vagueness surrounding unpaid internships, the U.S. Department of Labor released Fact Sheet #71, which contains the oft-cited six-part test courts use to determine if an unpaid internship is legal. In general, internships must be similar to training received in a classroom. Interns are considered “trainees” and may not displace regular employees, and employers may not derive an immediate advantage from the work performed by interns. The guidelines date back to a 1947 Supreme Court ruling involving the railroad industry, but many labor advocates say the rules are habitually flouted by companies looking to exploit a young workforce desperate to make professional contacts.

Normington said Dream Careers vets its listings for FSLA compliance and works directly with employers to make sure they provide academically sound programs, including providing lesson plans for students. “Every one of our employers we prescreen,” he said. “We do onsite visits to make sure it’s a place of employment that meets our requirements.”

At the same time, he said he thinks the FSLA’s famous six points are “ambiguous at best,” and don’t provide a solid blueprint for employers, educators or students. Over the years, Dream Careers has worked with many major media and entertainment organizations (Newsweek, which since August 2013 has been owned by IBT Media, is among the logos in the company’s website), including some like Warner Music Group that have been at the center of high-profile lawsuits. In 15 years, Normington said there have naturally been some instances of interns finding themselves in “indefensible” situations, but he said such cases are the exception. “The majority of employers are people who have benefited from an internship experience and are really trying earnestly to create that same welcoming environment to ensure that this is not an exploitative scenario,” he said.

But critics aren’t just worried about legal issues. Yamada said inordinate placement fees worsen the steep barriers to entry for underprivileged students who can’t afford to spend a summer working for no pay. It’s been one of the longest-running criticisms of unpaid internships -- that they establish a patently unfair playing field that permeates competitive industries and closes the door to all but a privileged few. “The unpaid intern economy works to the disadvantage of students and recent graduates who don’t have significant means,” Yamada said. “These internship broker companies basically reinforce that theme.”

Normington said he’s not blind to socioeconomic challenges faced by many students. “I absolutely agree with that as a concern,” he said. “Then that becomes the responsibility of academic institutions, the state and federal government and really creating greater financial aid and support for these students to get access to these opportunities.”

How you feel about intern-placement services probably boils down to how you feel about unpaid internships in general. Supporters obviously see them as a valuable career stepping-stone. But to others, paying your dues is getting a little too expensive. “To me, it really does raise a question, at least from a 'small E' ethical standpoint,” Yamada said. “What kind of a system are we as a society creating that requires so much in order to get a foot in the door?”

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