Obama Administration Considers Cracking Down on Unpaid Internships

The Obama administration is planning to crack down on companies that don't pay interns.

The Labor Department says most times it's illegal for millions of students to spend a summer, semester or year learning the inside of a private sector industry often for school credit – but no pay.

Unpaid internships are considered legal only if they are truly structured educational experiences for the benefit of the intern rather than the company and offer no promise of a job after the internship ends.

Labor lawyers argue that businesses need to review what they ask interns to do.

"If they're performing administrative tasks, clerical tasks, answering phones, getting copies – things that would otherwise displace a regular employee, then the Department of Labor may find that to be more looking like an employee than an intern," said Kara Maciel, a labor attorney at Epstein, Becker and Green, adding that those internships should be paid.

But business lobby groups note the economy is so tight, companies may have to cut back on or eliminate intern hiring  if they have to be paid – especially small businesses – causing students to miss valuable opportunities that bolster their resumes.

"They will likely not be able to pay for it," said Barbara Lang, vice president and chief executive of the DC Chamber of Commerce. "Unless government is going to provide some subsidy along with these requirements, they won't be able to provide these experiences anymore."

Supporters say the law should be enforced and companies should not get free labor. They also want to level the playing field between interns who can afford to work for free and those who can't.

"If you can't have an unpaid internship because you need to work, you're poor, or your family just doesn't have the means, you're cut out and that's wrong," said Ross Eisenbrey, vice president of the left-leaning Economic Policy Institute.

Eisenbrey says the law does not apply to nonprofit organizations or the federal government. But Rep. Darrell Issa thinks it should.

The California Republican sent a letter to the White House asking for "a listing of the number of unpaid interns and volunteers at the White House… along with a short description of their duties."

He believes the White House should live up to its own standard.

"If the government can't do it, certainly it's not fair to ask the private sector to do it in this case," he said.