Friday, July 6, 2012

Unpaid Internships: Education or Wage Theft?

internship
internship (Photo credit: Sean MacEntee)
In today's tough job market, students are scrambling to build their resumes.  Many corporations are taking advantage of this by offering unpaid internships.  Universities often go along with this, if the internship is for college credit and the student is actually learning something.  Sometimes the line between a bona fide internship and wage theft is very gray.  One result has been some lawsuits this year by former interns.

http://mediadecoder.blogs.nytimes.com/2012/02/01/former-intern-sues-hearst-over-unpaid-work-and-hopes-to-create-a-class-action/

The U.S. Department of Labor has enunciated a tough test for determining whether an unpaid internship passes muster under the Fair Labor Standards Act:

1.Internship is similar to training which would be given in an educational environment
2.Internship experience is for the intern's benefit;
3.Intern does not displace regular employees, but works under close supervision of existing staff;
4.Employer that provides the training derives no immediate advantage from the activities of the intern (and on occasion its operations may actually be impeded);
5.Intern is not necessarily entitled to a job at the conclusion; and
6.Employer and intern understand that the intern is not entitled to wages for the time spent in the internship.


But DOL has done little in the way of enforcement so far.


Consequently, at least in New Jersey, the vacuum is being filled by a law firm that specializes in advocating for interns' rights:


http://www.internlaw.com/

Here are this firm's guidelines for testing the legality of an unpaid internship:

http://www.internlaw.com/unpaid-interns-and-new-jersey-labor-laws/

And here's my take on the issue:


So Sue Me - Internship or slave labor?

Part 2 of 2 parts. (Read part 1)


ICE's alphabet soup stimulates a private suit
Meanwhile, Uncle Sam's post-9/11 regulation of international student workers appears at first blush to be a positive force for putting employers and students together. Prior to 9/11 the forms issued to international students by admissions officers at American universities were prepared on typewriters, often by staffers who knew little or nothing about U.S. immigration law.


Armed with a Form I-20, the foreign applicant visited a U.S. consulate in his home country, where more often than not he was issued an F-1 visa—which provided entry into the U.S. Once he left an international airport, such as New York's JFK, and walked into the city's mean streets, he could disappear without a trace. That's exactly what several of the 9/11 terrorists did, resurfacing on that fateful late-summer day in 2001 to attack the World Trade Center towers.


Post-9/11, the Immigration and Customs Enforcement (ICE) bureau was established, along with a computerized tracking system, SEVIS, as the exclusive way for colleges to issue I-20s. SEVIS requires certification and periodic recertification of participating schools. Both the ICE police and American consuls across the globe have access to student records posted there. When a school's current international attendee wants to work off campus (either before or after graduation), SEVIS is how they become authorized to do so. With post-graduation employment in particular requiring government review and approval, one might reasonably fear bureaucratic logjams.


Not so, says Kevin Morris, associate director of the office of international programs at Raleigh's Meredith College. To the contrary, he opines, "I really think the whole process is better. SEVIS has allowed better access by putting all the relevant information in one place." Service is good, he adds, citing in particular the SEVIS "Help Desk," which facilitates quick fixes when school officials make systemic errors. "The SEVIS system is consistent, and if there's one thing international students appreciate, it's consistency."


Optional Practical Training is the graduating international student's ticket to a year or more of employment with a U.S. organization. It's usually subject to quick government approval and little or no post-approval scrutiny. However, a knowledgeable source told me off the record that a graduate's nationality influences ICE's incentive to keep track… an echo of 9/11.


Additionally, ICE's looming presence in the background inspires employers to comply with the federal regs more closely than in the laissez-faire days of yore. This has generated its own ripple of litigation. For example, in Balaban v. Local 1104, Communication Workers of America, the plaintiff sued his employer-labor union under the federal labor laws.


Balaban, an international student attending SUNY Binghamton, concocted an odd legal theory. After Local 1104 organized the campus's graduate assistants, including Utku Balaban, he was elected to a three-year term as the Graduate Student Employees Union business agent. As a full-time student, he was allowed by U.S. immigration law to work only 20 hours per week while classes were in session. The union, as his employer, reasonably required that he keep time sheets.


Submission of a time sheet was the predicate to receiving his $1,200 monthly stipend. Balaban refused, protesting that, if he filled it out honestly, he'd have to admit to working more hours than the law allowed. The union declined to pay him. Following a five-month standoff, the plaintiff finally blinked, agreeing to submit his overdue time records.


The subsequent court opinion suggests that Balaban may have harbored some simmering hostility. In February 2009, while at the union hall to pick up some membership cards, wrote the judge, Balaban got into an altercation with the union local's executive vice president, whom he shoved against the wall. The result was a protection order from the Binghamton City Court, along with union charges against him.


In an internal union trial, Balaban was suspended by the local's executive board for seven years. That's when he sued.


On the union's motion for summary dismissal, federal judge Thomas McAvoy held that the union was well within its rights to require this international student to submit timesheets, so the local could prove its own compliance with federal law. "Plaintiff 's concern that completing a weekly schedule may cause him to admit that he is violating federal immigration law does not render the union's requirement unreasonable or unlawful." Judge McAvoy also found that the union had provided Balaban with plenty of "due process" so far as the assault charge was concerned. Consequently, His Honor threw Balaban's suit out the courtroom door.


Grad assistants' unions will rise, phoenix-like, again
Many public schools, such as SUNY, are required by their states' labor laws to deal fairly with union organizing efforts among graduate assistants. Meanwhile, the National Labor Relations Board has taken private colleges and universities on a roller coaster ride. When the NLRB was dominated by Democrats, during the Clinton years, New York University's grad students were deemed to be employees, covered by the National Labor Relations Act. Then, during the Bush Administration, a GOP-run board snatched back their statutory shelter, reversing the NYU ruling and declaring GAs to be primarily students.


In 2010 the Dems are back in the saddle. Without a doubt, unions interested in representing some of the tens of thousands of graduate assistants laboring in private higher education will bring their cases to a board now staffed by three Democrats and just one Republican. The flip that occurred in the Brown University case during the Bush era will most likely become a flop in 2010 or 2011. GAs will once again be converted by legal jargon from students into employees. Following such a re-reversal will be a flood of fresh organizing efforts and concomitant labor litigation.


Bottom Line: Uncle Sam's intensified interest in college-student labor will result in lots more litigation producing significant billable hours for lawyers.


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