INTERNSHIPS AND COLLEGE CREDIT
by Serona Elton

Most of the music business programs in colleges and universities today require, or strongly recommend, that students complete an internship at a music or entertainment related company. Any student searching for such an internship opportunity will quickly realize that virtually all of the internships in this field are unpaid and employers require the student get college credit for their time spent as an intern. Although students and educators have come to recognize this as the norm, many may not be familiar with the reasons behind it.

Why do employers require students to get college credit for their internship?

Both federal and state labor laws address internships. At the federal level there exists the Fair Labor Standards Act (FLSA), found at 29 U.S.C. 201. According to the U.S. Department of Labor website, the FLSA “prescribes standards for the basic minimum wage and overtime pay, and affects most private and public employment. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay.”

The key question is whether or not an intern is an “employee”. In order to find the answer, one has to look at both the FLSA and relevant case law. The following information, taken from the U.S. Department of Labor website, addresses that question and articulates the six criteria which are now used to assess internships.

The FLSA defines an employee as “any individual employed by an employer.” 29 U.S.C. 203(e)(1). Similarly, the FLSA definition of “[e]mploy’ includes to suffer or permit to work.” Id. The Supreme Court held over fifty years ago in Walling v. Portland Terminal Co., 330 U.S. 148 (1947), that the FLSA definition of “employ” does not make all persons employees who, without any express or implied compensation agreement, may work for their own advantage on the premises of another. Whether student interns are employees under the FLSA will depend upon all the circumstances surrounding their activities. For example, where certain work activities are performed by students that are simply an extension of their academic programs, we often would not assert that an employer-employee relationship exists for purposes of the FLSA. Thus, provided the six criteria listed below are met, where educational or training programs are designed to provide students with professional experience in the furtherance of their education, and the training is academically oriented for the benefit of the students, it is our position that the students will not be considered employees of the firm to which they are assigned. The six criteria, derived from the Supreme Court’s decision in Portland Terminal, are as follows:

1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
2. The training is for the benefit of the trainee;
3. The trainees do not displace regular employees, but work under close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer’s operations may actually be impeded;
5. The trainees are not necessarily entitled to a job at the completion of the training period; and
6. The employer and the trainee understand that the trainees are not entitled to wages for the time spent in training.

The simple answer is that the relationship between the student and the company must fall into one of two mutually exclusive categories: employee or intern. If the student is an employee, they must be compensated according to the FLSA. If the student is an intern, which assumes the six criteria have been met, the rules relating to minimum compensation for employees do not apply and the internship can be unpaid.

The college credit component comes into play when analyzing criteria number two. According to the Office of Enforcement Policy, Fair Labor Standards Team, within the U.S. Department of Labor, the criteria requiring the training to be for the benefit of the trainee is satisfied when a student receives college credit for performing the internship.

Unlike the music and entertainment industry, most other industries such as medicine, law, engineering and business pay their interns. Payment is handled by either paying the intern an hourly wage or a one-time stipend. In some cases, these payments, if they are at or above the legally required minimum wage, permit the employer to treat the student as an employee rather than an intern, thus removing the situational requirements articulated in the six criteria test. In other cases, employers have taken the position that compensating their interns, even while ensuring the six criteria remain satisfied, is simply a good thing to do.

Each state has its own labor laws which will also impact how employers in the state handle internships. State laws may be more restrictive than federal law, offering greater protection to interns than federal law provides. The page found at this address lists individual state websites, which can be consulted directly for additional information: http://www.dol.gov/esa/whd/state/state.htm

What constitutes college credit?

Several different approaches exist with respect to how colleges and universities provide credit for the internships their students perform. The following is a list of the most common approaches:

Approach 1: Students earn 1, 2, or 3 credits for a course designated as an internship course or for a course which has an internship component.

Approach 2: Students earn 0 credits for a single zero-credit course designated as an internship course. The course appears on their transcript, as does their grade for the course. (This approach is often taken to enable the student to enroll in an internship course without having to pay tuition for the course. One possible rationale is that while it may be acceptable to ask a student to be an unpaid intern, it may be too much to ask a student to pay for the privilege.)

Approach 3: Students do not take a course; rather the university or college career center offers an internship program which, once successfully completed, results in an official notation on the student’s transcript. In some cases, completion of the internship program is a requirement of the student’s major or program; in other cases it is optional.

I contacted several of the larger music companies in order to ascertain which of the above listed approaches satisfies the requirement that they often term as “college credit” in their internship job postings. Their policies are consistent with respect to accepting Approach 1. With respect to Approach 2, the responses were a mix between yes and no. With respect to Approach 3, generally the answer is yes, however, one of the companies indicated they would only accept the approach so long as the program in which the student is participating in consists of more than just the internship and requires the completion of an internship.

Internships make up an integral part of the total experiential learning opportunity portfolio that most of the music and entertainment industry programs offer students today. While, personally, I would like to see internships in this industry move to where students are paid at least minimum-wage, such a shift in mindset is unlikely to occur, especially in such difficult economic times. When students express frustration with the idea of working without financial compensation, I encourage them to think of their time spent at an internship as an investment in their future; focusing on the invaluable experience they are gaining and contacts they are making while there. And, of course, to remember that “credit” which will appear on their transcript.

Serona Elton is an Assistant Professor at the University of Miami’s Frost School of Music, in the Music Business and Entertainment Industry Program. Previously, she was the Vice-President, Mechanical Licensing and Repertoire Data Services for EMI Recorded Music, North America. She is also a licensed attorney in New York and Florida.