When Federal District Court Judge William H. Pauley III ruled in June that Fox Searchlight Pictures should have paid two interns who worked on its award-winning film “Black Swan,” he did not leave a lot of room for interpretation. Pauley concluded that unpaid internship programs were in clear and near-universal violation of the Fair Labor Standards Act (FLSA). Interns whose labor benefits their employer are workers and are thereby entitled to minimum wage. The judge was not creating new law; he was simply enforcing what has been on the books. The ruling has already convinced some employers to decide how to handle their unpaid help, and interns to organize efforts to recover their stolen pay.
Hollywood is not the only industry paying attention; university administrators are worried as well. The common practice of granting class credit for completed internships has contributed to the dramatic increase of unpaid internships. According to a survey-based study by the National Association of Colleges and Employers (NACE), a record 63 percent of 2013 graduates had completed an internship. A similar study by the college recruiting consultancy Intern Bridge found that just under half of interns received school credit. Credits are what universities are selling. Since outsourcing the actual teaching to employers saves money — it is cheaper to certify than instruct — American universities have jumped on the intern bandwagon.