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unpaid internships

Should You Take an Unpaid Internship?

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When you start your job hunt for your first job out of college, many employers hope or expect to see work experience on your resume. But between managing a course load, a social life, and possibly part-time work, fitting in an internship can be difficult. Especially an unpaid internship.

Working for less than minimum wage or for free through an internship isn’t uncommon. In 2017, 43% of internships were unpaid. And they are legal. The Fair Labor Standards Act (FLSA) requires for-profit employers to pay their employees. However, interns might not be considered employees if they are the primary beneficiary of the internship. The US Department of Labor (DOL) published seven factors that are often included as part of this test:

  1. The intern and the employer clearly understand that there is no expectation of compensation.
  2. The internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The intern’s work complements, rather than displaces, the work of paid regular employees while providing significant educational benefits to the intern.
  7. The intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

But even if they are common and legal, is an unpaid internship useful and worth your time?

To explore this topic I spoke with Beth Hendler-Grunt, President of Next Great Step, a company that provides career coaching for students and graduates.

The Data on Internship Experiences

Internships have long been a great opportunity for students to get real career experience before they graduate. And, research supports that. Data from the National Association of Colleges and Employers (NACE) found that students who have an internship have a better chance of finding a job than those who don’t.

But, there’s still some question as to whether an unpaid internship helps as much as a paid internship. Another study by the NACE Foundation found that unpaid internships negatively impact how long it takes a student to find a job offer after graduation. But, Hendler-Grunt noted that in her experience, she hasn’t seen it matter whether an opportunity is paid or unpaid work.

“If you can articulate what you did, the skills you acquired, and you are able to give a good example of how you were able to build that skillset, I don’t think it matters whether the internship was paid or not,” said Hendler-Grunt.

How to Decide Whether an Unpaid Internship is Right for You

If a paid opportunity isn’t available, should you take an unpaid internship? Here are some things to consider as you make your decision and the immediate advantages or disadvantages.

Can you afford to take an unpaid internship?

Doing work unpaid might be difficult to swing. With the high cost of education, many college students struggle to pay bills, and adding in working for free on top of coursework might not be a luxury that they can afford.

Evaluating whether you can truly afford an unpaid internship is an important first step in evaluating whether this is the right path for you. But Hendler-Grunt advises that there may be room to figure out how an unpaid internship could work for you, financially.

Often, when we think of internship programs we imagine full summer internships that require 40 hours per week. But according to Hendler-Grunt, that’s not necessarily going to be the case. “There are a lot of opportunities for part-time internships or part-time work. Could you spend 3-4 hours a day gaining skills at an unpaid internship so you can still fit in a part-time paid job?”

Adjusting your schedule, or finding an unpaid internship that has flexible hours or an expectation that you’ll only work part-time could make having an unpaid internship financially feasible.

What can you gain?

While you won’t be making money at an unpaid internship, there are other ways you can gain. If you’re considering working for free, really dig into what you can get from the internship.

“Are there things that they can offer you in terms of additional training? Can they help you get a certification in Google Analytics or web design? Barter for the experience that you want and access to learn things,” says Hendler-Grunt.

She also suggests considering what kind of access you’ll have to other valuable experiences while there. For example, she just hired her first intern. While the internship is paid, the rate is lower than what another internship opportunity may have paid. But she was able to offer valuable resources to her intern. Her intern is allowed to sit in on training sessions that usually cost thousands of dollars. Since Hendler-Grunt’s business is helping college graduates land their first job, this training is going to be extremely valuable to her intern, who will soon be looking for her own post-college job.

How can you assess whether an unpaid opportunity is going to offer you the experience you want, rather than sticking you with mindless tasks that don’t teach you anything? Don’t wait until the interview process to try and figure that out. Hendler-Grunt suggests talking to someone at the company even before you apply for the role.

“Find someone on Linkedin and tell them that you’d love to talk to them about the company they work for. If you’re trying to figure out whether a posting is worth applying to, you have to talk to a real person to get their insight into the company before applying,” advised Hendler-Grunt.

Finally, some schools require an internship for college credit prior to graduation. If your college has a relationship with businesses in the area, you might find that applying for an internship through this existing program could fast-track your application and give you valuable work experience.

Will it help you test out a career path?

While the data on unpaid internships isn’t overwhelmingly favorable, there are clear benefits. The NACE study that found unpaid internships negatively impact how long it takes a student to find a job after graduation, also found positive results. The study found that unpaid internships help confirm or reject interest in a career, help set career goals, and positively benefit networking.

Hendler-Grunt sees this benefit with the students she coaches. It’s valuable to see if you like the job early so you can switch paths before you spend time in a career that doesn’t suit you. “An internship lets you test out a career path early and if you don’t like it, you can pivot sooner,” said Hendler-Grunt.

And while she says most students are really focused on getting internships their junior year, if you look at this as an opportunity to test out a field, there’s no reason to wait until then to start looking for an internship. She recommends starting sooner. Maybe as a freshman, you can job shadow or do some work for free. A lot of employers want to see multiple job experiences — paid or unpaid — and getting started early gives you ample time to do that.

Deciding whether to take an unpaid internship is a personal choice, but if you do choose to participate in one, hopefully, this advice can help you make the most of it.

Disclaimer: The opinions expressed by the interview subjects are not necessarily those of Earnest.

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Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.