Unpaid Internships: A Survey of the NACE Membership. executive summary. Research EXECUTIVE SUMMARY NATIONAL ASSOCIATION OF COLLEGES AND EMPLOYERS

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1 EXECUTIVE SUMMARY NATIONAL ASSOCIATION OF COLLEGES AND EMPLOYERS Unpaid Internships: A Survey f the NACE Membership executive summary In Spring 2010, natinal media, the presidents f 13 universities, the Ecnmic Plicy Institute, and private citizens weighed in with their thughts n paid and unpaid internships, and the U.S. Department f Labr (DOL) released an advisry statement n the subject. As the prfessinal assciatin representing bth emplyer and cllege interests regarding the emplyment f new cllege graduates, the Natinal Assciatin f Clleges and Emplyers surveyed its membership t gain member insights int the practice t help the assciatin craft its psitin n unpaid internships. Separate surveys, cnducted nline, were prvided t cllege and emplyer members. The surveys were pen May 17 May 25, A ttal f 955 respnses were received, 713 frm cllege members (a 39.5 percent respnse rate) and 242 frm emplyer/recruiters (a 27.8 percent respnse rate). A summary f the surveys results fllws.

2 Executive Summary Grwth f Unpaid Internships Overall, there is little evidence frm the tw surveys f significant grwth in the amunt f unpaid internships, at least ver the past year. In fact, ne f the mre significant findings frm the surveys is that unpaid internships are relatively rare amng NACE emplyer members. Results shw that cllege members are relatively pen in allwing their students t take unpaid internships. Nearly 95 percent (94.5 percent) allw the psting f unpaid internships. (Nte: Sme respndents clarified this in their cmments, nting that they allwed unpaid internship pstings nly frm nnprfit and gvernment rganizatins.) The majrity f cllege respndents (60.3 percent) did reprt a slight increase in the number f pstings fr unpaid internships. The median change in the number f unpaid internship pstings is 5.5 percent. (Nte: A number f schls cmmented that they had nly recently begun t track the number f unpaid internships. As a result, they were unable t prvide any trend data.) In cntrast, emplyer members are much less likely t be invlved with unpaid internships. Apprximately 21 percent (20.8 percent) used unpaid interns during this past academic year. The majrity f thse using unpaid interns (64.8 percent) reprted n change in the number f unpaid internships during this past year. Academic Credit and Unpaid Internships Receiving academic credit r sme level f recgnitin frm the cllege r university is ne indicatr the DOL uses t legitimize unpaid internships in the fr-prfit sectr. The majrity f emplyer respndents wh use unpaid interns rely n having this academic link fr their interns, but clleges wh allw the psting f unpaid internships are much less likely t insist n this level f educatinal cntent fr their students. Nearly 60 percent (57.9 percent) f emplyer members wh use unpaid interns require the intern t btain academic credit r a certificate frm intern s schl as part f the internship. Only 29.9 percent f clleges that allw the psting f unpaid internships require their students t btain academic credit r a certificate as part f the internship. Amng the schls that d require credit, the mst frequently used academic cmpnent is faculty supervisin f the internship alng with written assignments (84.6 percent require faculty supervisin and 74.7 percent insist n written assignments). Actual classrm experience assciated with the internship is much less cmmn 27.6 percent. Just ver 6 percent prvide academic credit with n specific requirements that need t be fulfilled by the student/intern. Cmments indicate cnsiderable sentiment amng cllege respndents that the wrk experience alne is an educatinal cmpnent and, cnsequently, there is cnsiderable bjectin amng the cllege respndents that there be a frmal educatinal r academic credit assciated with the internship paid r unpaid. 2/NACE NACE Research: Unpaid Internships: A Survey f the NACE Membership

3 Executive Summary Research DOL Criteria Respndents were asked the extent t which they agreed r disagreed with the individual criteria used by the DOL in determining the legitimacy f an unpaid internship at a fr-prfit cmpany. Fr five f the six criteria, a majrity f bth cllege and emplyer respndents agreed with the standards applied by DOL. The ne standard that a majrity f the respndents disagreed with was that an emplyer receive n immediate advantage frm the internship. Nearly tw-thirds (63.4 percent) f cllege respndents disagreed with this standard (19.8 percent strngly disagreed), and 52.8 percent f emplyer respndents disagreed (11.3 percent strngly). Belw are the percentages agreeing with individual DOL criteria: Internship cntains significant educatinal cmpnent Cllege 67.4 percent (26.5 percent strngly) Emplyer 52.2 percent (13.3 percent strngly) Internship is fr the benefit f the student Cllege 84.2 percent (41.1 percent strngly) Emplyer 70.8 percent (31.6 percent strngly) Intern des nt displace regular emplyees Cllege 82.8 percent (48.2 percent strngly) Emplyer 80.2 percent (43.4 percent strngly) Emplyer derives n immediate advantage Cllege 19.3 percent (7.5 percent strngly) Emplyer 24.5 percent (9.9 percent strngly) Intern nt entitled t a jb Cllege 88.3 percent (42.4 percent strngly) Emplyer 83.8 percent (45.7 percent strngly) Emplyer and intern understand the intern is nt entitled t wages Cllege 71.8 percent (32.3 percent strngly) Emplyer 65.7 percent (38.6 percent strngly) NACE Research: Unpaid Internships: A Survey f the NACE Membership NACE/3

4 Executive Summary Respnsibility fr Evaluating Internships Respndents were asked if the DOL shuld be mre active in evaluating the benefit f an unpaid internship r if schls shuld take n the rle f gatekeeper. Generally, bth emplyer and cllege respndents favred the cllege r university acting as the gatekeeper percent (34 percent strngly) f cllege respndents felt the schls shuld act as the gatekeeper rather than the federal gvernment percent (19.2 percent strngly) f emplyer respndents preferred having the schls serve in this capacity. There was sme ambivalence amng respndents as t having the DOL be mre active in updating and clarifying the regulatins relative t unpaid interns. 46 percent f cllege respndents favred the DOL becming mre active cmpared with 30.4 percent wh ppsed increased activity frm the DOL percent f emplyer respndents favred a mre active DOL cmpared with 16.8 percent wh did nt. Cmments, particularly frm cllege members, suggest several caveats abut interpreting these particular respnses. A number f cllege respndents questined whether mst schls have the infrastructure in place t act effectively as gatekeeper. Others questined what it might mean DOL fr be mre active: The implicatin was that any increase in gvernment activity in this area might have an intimidating effect n emplyers and might limit internship pprtunities fr students. Cmments Cllege The mst frequently expressed sentiments by cllege respndents can be placed int three categries. 1. All internships, even thse that are unpaid, prvide valuable experience t the student and shuld nt be restricted. As ne respndent nted, Any internship is better than n internship. This sentiment was the mst frequently expressed pinin (42 expressins) amng cllege respndents ffering cmments. 2. Interestingly, the secnd mst frequently cited sentiment (34 expressins) was that all internships shuld be paid internships. Cmmentatrs in this categry suggested that unpaid internships were a pr idea fr several reasns: a. unpaid internships were essentially vehicles fr crpratins t explit student labr; 4/NACE NACE Research: Unpaid Internships: A Survey f the NACE Membership

5 Executive Summary Research b. c. unpaid internships were discriminatry in that pr students culd nt affrd t take n these internships; and unpaid internships were nt taken as serius wrk experiences by either the student r the emplyer. 3. The third categry f sentiments (with 32 expressins) was that the DOL shuld update the standards that apply t evaluating the legality f an unpaid internship. Many f these cmments nted that the DOL regulatins were utdated and designed mre fr training prgrams than fr mdern day internships. While a few respndents expressed the sentiment that the regulatins shuld be redesigned frm the grund up, mst cmmentatrs fcused n tw f the six standards. A number f respndents thught that the regulatin that unpaid internships pr- vide n immediate benefit t the emplyer was, in the wrds f ne respndent, ludicrus. These respndents felt that this regulatin needed immediate revisin t recgnize the reality f what makes the internship experience valuable fr bth the student and the emplyer. a. b. The ther regulatin that cllege respndents felt needed updating r at least significant clarificatin was that the internship cntain a significant educatinal cmpnent. Many respndents felt that emplyers relied n cllege credit fr the internship as a tl fr making the internship legitimate in the eyes f DOL. As a result, an undue burden is placed n the university t prvide an academic cnnectin fr activities that d nt have any academic value. Other sentiments that received multiple respnses were: Universities shuld be the primary gatekeeper rather than the federal gvern- ment in evaluating an internship. Cnversely, a smewhat smaller grup f respndents felt strngly that universi- ties, particularly career services, did nt have the resurces t adequately plice internships and that relying n schls t gauge the quality f internships wuld result in an uneven system. As an extensin f wh shuld be respnsible fr evaluating the internship, there was a significant number f respndents that felt the respnsibility lay with the student. These respndents felt that students shuld be capable f judging the internship n their wn and that if the student and emplyer agreed t the terms (unpaid r nt) it was nt the business f either the university r the federal gvernment t interfere. Requiring paid internships discriminated against smaller cmmunities because emplyers in thse lcatins culd nt affrd t pay their interns. The new DOL regulatins r scrutiny had a chilling effect n all internships because emplyers were frightened by the increased scrutiny. NACE Research: Unpaid Internships: A Survey f the NACE Membership NACE/5

6 Executive Summary The cntrversy ver unpaid internships was a tempest in a teapt as the respndent nted that he r she has nt seen any increase in the amunt f unpaid internships r any abuse cnnected with unpaid internships. Cmments Emplyer There were far fewer cmments frm emplyer respndents than frm their cllege cunterparts. Three sets f cmments received mre than three expressins frm emplyer respndents. They were: 1. A reiteratin that the emplyer did nt hire r use unpaid interns. (18 respnses) 2. There shuld nt be any unpaid internships. (8 respnses) 3. The DOL shuld scrutinize internships because emplyers culd nt be trusted emplyers wuld take advantage f ecnmic cnditins t explit the interns. (5 respnses) Only tw ther cmments culd be classed as having multiple respnses. Even unpaid internships have value fr the student (3 respnses), and Let the market determine the cmpensatin fr the internship (2 respnses). 62 Highland Avenue Bethlehem, PA Fax: