Unpaid internships: A rip-off or legitimate resume booster?

It seems that Mark Cuban has stirred up a bit of a hornet’s nest with his recent post about unpaid internships. He’s already received 90 comments, ranging from wholehearted approval of his argument (pro unpaid internships) to outright disgust that he’d support such a notion.

He explains:

“This summer, in response to the changing sports media landscape, I wanted to
create a “media pool” for the Mavs. I wanted to assemble a group of unpaid
interns that would acquire video, write game reports, track unique stats, do
interviews, interact with fans, and then compile all of this incremental media
and provide it free to any and every outlet we could think of.”

His justification for taking the unpaid internship route was this:

“One silver lining of a “great recession” that we are now in is that there are a
lot of incredibly talented people without jobs, or who have lost their jobs. I
didn’t care if they were 18 years old or 73 years old. I thought we could
assemble a talented group who would enjoy the internships and could also gain
valuable experience to add to their resumes.”

But his plans were quickly halted when he heard back from his HR department. He learned that to be legal, interns must be paid, unless they are performing work that is of no value to the organization. This didn’t sit well with Mark - that whether or not the trainee would welcome the “on the job” experience, or be willing to work for no pay, does not come into play.

To be clear, the U.S. Department of Labor has developed specific criteria for determining an internship’s pay status. For an internship to be unpaid, it must meet these six legal tests:

1. It must be an educational experience, the equivalent of vocational school
2. It must primarily benefit the trainee
3. The trainee cannot do work that would otherwise be done by a paid employee, and must work under the close supervision of a manager
4. The employer cannot derive immediate advantage from the trainee’s work or profit from it
5. The employer must not promise a paid job at the completion of the training period
6. The employer and trainee must agree (ideally in writing) that no wages will be paid during the training period


On one side of the ring are the people who feel that an internship is a great way for someone to try out a particular industry and gain practical experience – and if that person is willing to get a “foot in the door” for free, more power to him. (A risk vs. opportunity scenario.) On the other side of the ring are the people who feel that it’s wrong for an individual to work for a company, in any capacity, and not get paid. That no one should do the work of a paid employee, no matter what the possible pay-off later, for free.

What do you think? Should the guidelines surrounding unpaid internships be loosened? How does your business handle the matter of unpaid vs. paid internships – and how do you make the most of the employer-trainee relationship so that everyone benefits?

Unpaid internships: A rip-off or legitimate resume booster?