Are Unpaid Interns Exploited by Employers?

Q: My son, a recent college graduate, has been working for six months as an unpaid intern (well, he does get a small stipend) for a small, respected company in the professional field he majored in. I think they're taking advantage of him, using him and other interns as free labor. He disagrees, saying that he knows several successful young employees there who also started out as interns. Do you think this intern thing is ethical?

Yes, depending on how it's done. The intern's tasks should be challenging and commensurate with his or her education. And the intern is entitled to expect strong mentoring and coaching from interested superiors.

In this very difficult job market, internships -- whether they pay a small stipend or nothing at all -- are a pragmatic way for ambitious young workers to get inside a good company and prove their worth. Many self-confident young grads are more than willing to take that chance, especially if they know other interns who got permanent job offers.

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Companies benefit, too -- and not just from the salary savings. They are, in essence, using internships as auditions for entry-level jobs. It's a more reliable way of hiring than trying to judge an unproven applicant from a resume and interview, with the legal risks of having to lay off the new hire after an unsatisfactory probationary period. With an intern, if it doesn't "work out," the internship can be terminated with face-saving on both sides.

Having said that, I have heard of well-qualified college students and young grads being hired as interns and then given menial tasks and no opportunities for professional growth. This is exploitative, especially if the interns were promised something better. And if interns serve for a year or more without some indication that a job offer is likely, they should raise the issue with superiors. It might be time to move on. Ideally, the internship enhanced their job skills and resume.

Send your own money-and-ethics question to editor in chief Knight Kiplinger.