Want an Unpaid Internship So You Can Get Valuable Experience ? – Screw You !

That is what the US Department of Labor is saying to everyone and anyone who wants to get their foot in the door.  You are SOL. There is no such thing as an unpaid intern anymore.  Our government at its finest.

This summer, in response to the changing sports media landscape, I wanted to create a “media pool” for the Mavs.  I wanted to assemble a group of unpaid interns that would acquire video, write game reports, track unique stats, do interviews, interact with fans, and then compile all of this incremental media and provide it free to any and every outlet we could think of. If a middle school newspaper or website wanted up to the minute Mavs reports, check. We had em.  Social networks ? All the content you need. Of course we would update our Mavs.com, mavswiki.com, friends.mavs.com websites and offer the content to any and every blogger out there.

The good news is that we would create fresh content and make it available in realtime. Call it “Event Driven” media.  The bad news is that there was no way we were going to be able to charge for it. Nor was there any assurances that we could generate enough traffic for the content that we could reasonably believe that we could earn any advertising revenue. In fact, it probably would have cost us more to try to sell advertising via ad networks (contracts, monitoring,  reports) than we could recoup in ad revenues.

Given we were lightyears from this being a self sustaining business, and that with the economy in the shitter we didnt have excess financial resources to subsidize this effort, I decided to use unapid interns.

One silver lining of a “great recession” that we are now in is that there are a lot of incredibly talented people without jobs, or who have lost their jobs. I didn’t care if they were 18 years old or 73 years old.  I thought we could assemble a talented group who would enjoy the internships and could also gain valuable experience to add to their resumes.  When the economy opened up, one of two things would hopefully occur.  We were generating revenue from this effort and we could hire them, or they had just built up their resumes and improved their chances of finding a paying job.

Makes sense right ?

Wrong. Enter the US Government.

This is what our HR person, who his supersmart and really knows his stuff came back with

“The law says that interns have to be paid unless they are perfoming work that is of no value to the organization; ie., helps them in some way but we get no benefit from their work.  Thus we would have to create work that is useless to us  if we choose not to pay them.  How silly is that? ”

Silly indeed.  My response:

“So u r sayin g there r no legally unpaid interns in the state or country ?”

This is what he sent me, proving  that our government was truly ridiculous:

Unpaid Internships – Common but Illegal

A common, but frequently unreported labor violation is the use of unpaid interns in violation of minimum wage and possibly overtime laws.  The scenario is fairly typical: a company offers an opportunity to ‘break into the business’ in exchange for the intern working for free.  You see many examples of this in the entertainment industry.  In fact, despite jobs sites such as Craigslist prohibiting the posting of unpaid “internships,” you can almost always find one posted.  Some companies try to get around the law by requiring that the internship be part of a college program.  However, there is no exception to the law allowed just because the “intern” may receive college credit.  While it might be possible for a college credit course to require some type of training for a company, the vast majority of these internships are in violation of Federal as well as California labor laws.

In order to qualify as an unpaid internship, the requirement is simple:  no work can be performed that is of any benefit at all to the company.  That is, you can not deliver mail, sort files, file papers, organize a person’s calendar, conduct market research, write reports, watch television shows and report on them, read scripts, schedule interviews, or any other job that assists the employer in any way in running their business.

Examples of internships that have been legal are where the job is a “dummy” job.  For example, there was a case of an internship for working on a train.  The company had the interns driving trains from one end of their yard to the other under close supervision.  The moving of the trains was completely unnecessary and was just being done to train the potential employees. As such, no “work” was being performed, so the internship was legal.  On the other hand, if the workers were moving the trains as part of the regular re-positioning of the trains, but were still performing it under close supervision, they would be required to be paid for the work.

Thus, if in the entertainment industry, you read scripts that have already been read and rejected by the company and the company will not use your input in any way but is simply instructing you on how to read scripts, then they would not need to pay you for your time.  However, if you read the scripts and perform any work that is used by anyone in the company to make any type of decision about that script, then you must be paid for your time.

Another common type of unpaid internship is in martial arts schools that require students to teach classes in order to receive additional belts.  This practice is illegal unless the student is paid for the time.  Because the act of teaching a class is work that benefits the employer, it must be paid for.

The U.S. Department of Labor has outlined a list of criteria that ALL must be met in order for an internship to be unpaid.

  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.

From the above list, #4 is really the key one – all the others will follow from whether the employer derives any immediate benefit from the activities.

The main reason that you do not see more lawsuits regarding unpaid internships is that the interns are very unlikely to sue.  In most cases, they fear being blacklisted, as they will undoubtedly need to use the internship as a reference to get any future work.

This is where California’s Private Attorney General Act comes in.  Because this law allows anyone at the company to sue for labor violations, even if they themselves are not affected by the violation, it is now possible for these companies to be brought into compliance with the law.  If you work for a company that uses unpaid interns and would like to put an end to this illegal practice, you should consider bringing a Private Attorney General cause of action.

Of course, if the internship is work, not only minimum wage must be paid, but also California overtime (8 in a day / 40 in a week) as well as meal and rest breaks.

Welcome to the USA of the 2009. Where the government, both Republicans and Democrats,  thinks that doing nothing is a far better alternative than being productive and gaining experience ! Where our politicians would rather see you pay out of your pocket to go back to school rather than get valuable on the job experience.

If you are in a position where you think an unpaid internship would benefit you and your career, please contact your local state representative and senator and let them know how stupid you think this law is.

And in the meantime, for all of you who have been sending me emails asking for an unpaid internship and telling me how valuable the experience would be to you. Now you know why I dont respond.

105 thoughts on “Want an Unpaid Internship So You Can Get Valuable Experience ? – Screw You !

  1. Hi Mark-

    Just stumbled across this post and I felt compelled to respond… I guess I’d say “come on, man!” You are the owner of the professional basketball team and you can’t afford to pay a group of people minimum wage to be your interns? I think that’s a little ridiculous.

    […] and “volunteer work?” Am I the only one who doesn’t see any difference? Well, this situation tells me that the control freak government might as well make volunteer work illegal, to be […]


    Comment by exdoor -

  2. Hi Mark-

    Just stumbled across this post and I felt compelled to respond… I guess I’d say “come on, man!” You are the owner of the professional basketball team and you can’t afford to pay a group of people minimum wage to be your interns? I think that’s a little ridiculous.

    People should not be asked to work for nothing, and that is exactly what you’re asking them to do. You mention above in this recession “there are a lot of incredibly talented people without jobs, or who have lost their jobs.” The appropriate thing to do would not be to ask them (especially them) to work without pay… It would be to at least help them not only get some fun and great experience (which the internships would no doubt provide), but also some money to help them get through this recession.

    I am of the belief that if you have something that you want done that will benefit your company or organization, and you want to hire someone to come in and do it well, you should pay them. I really dislike all of these unpaid summer internships that college students often consider. They’re in college. They’re poor enough, and yet these companies want to try to benefit from their need to get experience by not paying them?

    Come on!

    Comment by brucehammond -

  3. From my experience being an unpaid intern I’d have to say I think the law is a good one. Keep in mind not all companies know what they’re doing, you’re assuming all of the work these interns are doing is progressive towards learning efficiently which is not the case. Plus minimum wage is pocket change, people need gas money and something to eat. I did work for a company who turned out to be a bunch of jerks and they’re using my software right now on school attendance programs. But Mark what is the difference to the Mavs? How much would minimum wage cost to employ all those people for 6 months or a year? If I were in your position financially it would seem that the Mavs would be my play money, and I’d look to your business ventures to bring in the money. Good post though.

    Comment by pritchard12 -

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  6. OBAMA. It is under his administration. In the former Soviet Union, every one was paid. No “ifs”, “ands”, or “buts”. There is no volunteering. You are a member of the state and the state takes care of ‘the people’. If your finding it hard to swallow, don’t vote for him and hey, you asked a political question and here was my political answer.

    Comment by desertdawg1991 -

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  12. $7.25 x 40 hours x 12 weeks = $3480. thats about enough to pay for an apartment for 3 months and maybe some ramen noodles. The experience may be invaluable, but come on. the big companies offering these unpaid internships can afford $3.5k. this entire discussion is BS. if you want an intern you either want them to do something to help you or you want to train a possible future employee. the economy may be rough but really, Mark…

    Comment by grubby17 -

  13. I am just curious where your HR person got their information. In every state, including California, internships are offered legally unpaid. Simply take a look at a US Congressman’s website where internships are offered on an unpaid basis to offer hands-on experience in a congressional office.

    Comment by flyby812 -

  14. I know I’m piping in a little late here, but WOW – talk about hitting some nerves with this particular post. I found the whole subject (and people’s responses to it) so interesting that I even posted a reply on my blog, http://gneil.blogspot.com/2009/09/unpaid-internships-rip-off-or.html

    Always the mediator, I believe in some sort of middle ground with this. I think that “intern queen” hit the nail on the head with her insights: “Stating that interns can do work of “no value” also isn’t right. Employers wouldn’t hire interns if they were of no value. Internships should be a two-way street. The student brings value to the company and the company provides the student with a valuable experience.”

    Yet, unlike intern queen, I feel that a valuable experience SHOULD include a paycheck. Otherwise, the whole matter looks and sounds like exploitation. Interns who are offering their time and talents to a business should not be treated like volunteers.

    Comment by kbernhardt -

  15. Well that is interesting- Guess I should contact the Department of Energy and the White House where I was an UNPAID INTERN. Looking back on my career, the number of unpaid internships I had put me light years ahead of my peers. I gained far more from my internships than the firms gained from me.

    Comment by simontemplarv1800 -

  16. Mark
    I backed my bags and moved to Dallas two days after graduating college to take an unpaid internship with the Mavericks seven years ago. It was three months of the valuable training which transitioned into a six year career with the Mavs. That internship launched me into a career that would not of been available without taking that risk. Thanks for giving me that opportunity! To reach your dreams you have to take risk to reach them.

    Comment by msnyderwoot -

  17. Wow I had no idea and Les Brown, the motivational speaker is always talking about volunteering to get your foot in the door at a company you want to work for. What does a person do now when they are trying to get in…?
    Catherine – 8 Women Dream

    Comment by 8womendream -

  18. I agree wholeheartedly on this one. The issue basically boils down to this– do you feel that individuals should have the right to determine what they may do with their own time and labor and be responsible for the risks involved? Or is it necessary to throw the baby out with the bathwater so to speak, and limit freedom in order to save some people from themselves with regards to abuses (which of course would happen– but as pointed out in other comments, already does as there are plenty who work around the law). I firmly believe that if a person wishes to take the risk of putting out time and effort and accept the possibility of nothing more coming out of it than a few lines on a resume, great, more power to them– it sure beats an empty gap on a resume. Of course, it will favor those who have the means, whether their own or their parents’ or such, to devote time to unpaid labor, but once again, it comes down to a principle. Should we be trying to legislate what is “fair”? This applies too to the arguments that paid employees could be put at risk by the practice. But then, it probably wouldn’t come to that often given the short time most unpaid interns would stay and the limited supply of them. The market would most likely regulate itself, and though some people would be taken advantage of, I have a feeling many, via the internet and other sources, would soon learn which opportunities had potential and which were a waste of time.

    However, because there would be too much opposition to simply allowing it with no restrictions (as seen here; I know not everyone will hold the same libertarian principles I do), then how about a compromise– allow for unpaid interns that provide benefit for a company, but set a strict time limit, say 3 to 6 months, on how long they were allowed to stay with that company before having to leave or be hired. Would allow for a decent trial/interview period but may keep some potential abuses in check. I know that at the University I work for, one scholarship we award includes a $4k “enrichment experience” at a certain point, and one of the things that it can be used for is an unpaid internship. Most students use it during the summer, and the money allows them to participate in these valuable, real-world experiences. Such a harsh restriction seriously limits the number of such positions available, and it seems a shame to limit such opportunities because the government has decided we can’t be trusted with the right to choose how to spend our time and be allowed to take a risk… especially since such values are supposedly what this country was partly founded on.

    Comment by bucfanpaka -

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  20. thanks for writing and posting this. I can finally stop yelling at my lawyer telling him that he is an idiot when he tells me I can’t have free interns. I’m not going to apologize. I may start listening to him again.

    Comment by jamesbird -

  21. Mark, can I ask a couple leading questions:

    What is your opinion on other resources this venture will cost? Do you think you should be able to get office space for free? The computers that will be used for the work? Administrative costs?

    If not, why not?

    from mc> if someone wants to give you free rent, computers or buildings for free, they can. its not illegal. it is their choice. same w barter.

    Comment by tcartony -

  22. http://www.dol.gov/_sec/media/internprogram.htm

    “Welcome to the U.S. Department of Labor’s Internship Program Web site. The Department of Labor (DOL) has welcomed students across the nation, to participate in the Student Internship Program. The Student Internship Program provides students with the opportunity to learn about how federal government agencies operate and to interact with the leaders of various agencies within DOL.

    Students can participate in weekly brown bag lunch discussions, attend agency presentations, and work on projects assigned to them by their agency. Previous interns have had opportunities to work in a variety of areas including public affairs, speechwriting, and outreach programs. Students will also be delegated general administrative duties, and should have strong writing and research skills. ”

    Unfortunately, it appears as if the Department of Labor isn’t accepting applications for internships at this time…presumably because that’s illegal. Maybe I should send my resume to one of the other cabinet agencies, the White House, or the office of any member of congress or the Senate and see if they’ve filled all of their unpaid internships already.

    Comment by norrab2 -

  23. Pingback: Fact: unpaid internships are against the law | amaxing pictures

  24. I agree if someone is dumb/smart enough to work for free then by all means. The only issue I see is it cheapens professional work done by already established professionals, and thus employers will feel they don’t need to pay for this type of work.

    Comment by dannychughes -

  25. Mark,
    As you know, the original idea behind interns was to get them experience, which led to many interns getting hired by the company they interned with. This still happens, not sure if this was your plan? As many Bloggers have made it a point to comment on your bankroll, I think it’s irrelevant if you have the money to pay for Interns services or not.

    I do find it interesting how the government wants to get involved in many of the smaller issues, when the bigger ones are still causing havoc.

    Bottom line, if I agree to intern for you, for free, why does anyone have the right to butt in? This should be a decision I make.

    When are you running for something? Senate maybe 🙂

    Comment by freeze1599 -

  26. Pingback: Unpaid Internships and Power « The First Excited State

  27. Your intentions are good. Some people don’t have good intentions and take advantage of people.

    Comment by 90tiger -

  28. Pingback: Mark Cuban: Unpaid Internship Article « GrouperEye.com Blog

  29. Man I am really mad about this one. You want unpaid interns to “shoulder some risk” when you feel you can’t? When presented with arguments how this isn’t actually fair, you say “That’s the way the real world works.” So the moment you say that, you’re abdicating any sense of what is right or fair with cold-hearted pragmatism.

    Well, guess what? The government stepping in and saying “Once in a blue moon when business does something ain’t isnt fair we’re going to try and put a top to it.” That’s how the real world SHOULD work. Occasionally it does. You can’t abdicate any responsibility for doing what’s fair — only to complain when someone else steps in and tries to.

    Comment by anotherdfa -

  30. Ps. You say: ” When the economy opened up, one of two things would hopefully occur. We were generating revenue from this effort and we could hire them, or they had just built up their resumes and improved their chances of finding a paying job.”

    Correct Mark — that’s a speculative investment. If you want to speculate, then you **invest** in the program to find the talent that will pay off later. You don’t get lottery tickets for FREE. I would have thought you of all people would have seen that.

    Comment by anotherdfa -

  31. Mark’s just used to the unpaid interns in NCAA basketball working themselves into his NBA firm.

    Mark, you’re being very disingenuous about the true value of this program. All your blathering about how to make money off free content by controlling distribution and now this. Why would you want to do it if you saw no monetary value from it? Is it just to increase the amount of “free” content out there? What’s the real purpose here? You might be able to garner more sympathy to your “plight” if you divulged why you can pay Jason Kidd $8 million but you feel the value of the content generated by these interns is exactly $0.

    Yes, it is relevant to bring up outsized NBA salaries. The reason is you’re paying Kidd what you think his services are really worth, and justifying it by the revenue you recoup in other places.

    If unpaid internships have any benefit to the slaves, it’s by complete accident. Either they have value to your business that can be reflected in the bottom line or they don’t. If they don’t, then why the heck are you crying about not having them.

    Comment by anotherdfa -

  32. What is this world coming too. Pay the workers!

    Lets say you get your 20 interns working for free. During this time you get all their ideas and hard work for free. Why would you need to hire them? What is the incentive for you to keep them, when you can just get another group of free interns next year.

    The statistics you want for the Mavs and the videos etc.
    Well you know it will have barely any chance of being successful for revenue as you have stated, so the interns have probably no chance at being hired as a result. That’s not fair. Everyone wants to work for Mr. Cuban and they have barely a chance.
    You might hire 1 intern out of 20. Well that is not a sporting chance.

    It is not like Broadcast.com or when that one woman made a million in stock options imho.

    This is one of the first times I agree with the government.

    James Blunt

    Then you get all there ability for a year all their sweat equity.

    Comment by wildwhitewoody -

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  34. I’m totally surprised at any negative comments about this

    People COMPETE for internships — they don’t have to do them, they also don’t have to ever read a book outside of school or set foot in a library

    If they dont like the internship they can also quit

    Solution: hire them on commission only with no benefits. If they make any extra money during the internship- they get 50% commission. As employer you have the right to set no commission minimums or quotas — so if they generate zero or $10 in commission all summer, is that a problem? Or has the govt decided that commission is illegal too. How about sales? That still legal?

    I’ve seen some stupid things but that has got to be among the stupidest I’ve seen all year.

    I’ve had about 30 unpaid interns over the years, some with college programs, some on their own. I had one who lived to far to commute to the office so I directed him in writing a pretty advanced economic report – it cut my time on the report down by 90% and after I had it professionally formatted he then had a very nice item to bring to interviews- win /win.

    This is especially ironic because of the many unemployed – but also the gap with job openings. Last I checked there were 3 million job openings — despite the record number of unemployed. What does this mean? It means that there are tons of jobs open and the companies cant find anyone qualified for them. Search for engineering jobs for example. In my industry, financial services, thousands of bright ex-Lehman and other people are jobless — many openings but all for very specialized traders and Chinese speakers etc.

    Unpaid internships can help the interns, the company and the country.

    -bruce fenton

    Comment by brucefenton -

  35. Very simple: I think this is good. It seems you don’t have a business plan (i.e., selling something to customers and pay you and your employees from revenues) and you wanted unpaid workforce (which you call interns) to sustain it. That won’t work? Great.

    The idea of an internship is to learn something during on-the-job training. The idea of having people /work/ for free (by pretending to provide them with ‘experience’) is downright disgusting. In a staff of 10+ people, a person who is (under close supervision) there to get some, possibly education-related experience: good. Everything else: exploitation.

    Comment by burtchen -

  36. As a senior in college, I spent a few months doing an unpaid internship. I lived on money earned from scholarships and grants during school – they are out there. My daddy didn’t have a dime for me to be on so I had no choice. If I wanted to go to get an education, I had to find a way to do it.

    For all those defending students NEEDING to make minimum wage during an internship, stop. I learned independence, persistance and what I didn’t want to do as much as what I did want to do during that time. I couldn’t have received that experience at a run of the mill part time job or in school.

    I’m 25 years old now, hard slogging my way through creating a successful business on very little money. I would be in big trouble if I put all my value in what I was making versus what I was experiencing.

    Comment by nicksalz -

  37. Mark, You are 100% wrong on this topic.

    I have read every post on this blog, and really enjoy your take on topics that span different parts of your “ownership empire”. I haven’t agreed with everything you have said about YouTube, but nothing that would elicit me to leave a comment.

    This one is different.

    I was an unpaid intern for a MLB team 12 years ago. The project I worked on was similar to what you want to accomplish with your unpaid interns. A experiment in which there is no precedent because you are a forward looking organization, looking to push the envelope to benefit your current or prospective customers.

    Our experiment “worked”. And by worked I mean the following year a sponsor agreed to a $250k contract. That contract can only be traced back to three free interns and a hardly paid front office employee. Although the program no longer exists in that organization, other professional sports franchises adapted and use it to this day.

    My result wasn’t as great of a story. As with most unpaid internships the carrot was dangled of a job if all went well. You know the result as described above – it went well – what wasn’t explained was all the “if’s” ownership held in their back pocket.

    Ownership changed during the off season. New ownership determined the program, which at $250k is really peanuts, could be handled by current staff – no new staff hired. I can’t say that isn’t true, and wasn’t a good business decision, heck I would have made the same decision with the data the free interns provided.

    The point is, the government may get in the way of lots of things you don’t like when it comes to your businesses. This isn’t one of them, and you shouldn’t complain. If I was simply compensated for my time, at a really low rate, I might still be in sports world generating new ideas. Instead I moved into industries (I have held a number of jobs since then) which valued my time even if the project didn’t have favorable results. Enough cycles of that same story means the sports industry will lack creative talent willing to take risks – which I am sure you don’t want to see.

    Your small investment today will result in big dividends later. You already know this. And can afford this. Why use your blogging time to even address this topic?

    I sense this is bitterness towards the government on across the board issues – not just a $10k investment in a few interns.

    *BTW – The idea is a great one. Why not devote some of your already paid staff to get out there and push the envelope. My experience in MLB tells me there is tons of untapped talent in front offices who would appreciate you giving this responsibility to them.

    Comment by taylormade01 -

  38. also, if you want to get to the gist of the tea party movement, you’ll understand its laws like these propelling the movement. of course, the MSM and politicians are oblivious to this.

    Comment by docvangraf -

  39. you PAY teachers to learn. yet, you should be PAID to learn by professionals while gaining real world experience? makes perfect sense. more importantly, how about standing up for freedom?

    Comment by docvangraf -

  40. this is crazy, I’ve had unpaid internships for both my congresswoman and multiple political campaigns. (actual in office official internships, not just volunteering)

    Comment by carnitastaco -

  41. Mark,

    I run INTERN QUEEN INC (http://www.internqueen.com and http://www.quarterlife.com/intern)and my site currently features over 400 unpaid internship opportunities. Many companies have debated over similar issues and have really had to keep a close-watch over their internship program to make sure they aren’t violating any labor laws.

    I do applaud you for just taking the time to pay attention to your internship program and explore ways to make it a valuable and legal expeirence. I work with so many CEOS who have no idea what their interns are doing on a day-to-day basis and don’t take the time to even read the internships standards.

    The DOL does need to re-evaluate their position on what makes an internship “legal” as their standards are simply confusing and allow for too many varied interpretations. Stating that interns can do work of “no value” also isn’t right. Employers wouldn’t hire interns if they were of no value. Internships should be a two-way street. The student brings value to the company and the company provides the student with a valuable experience. A valuable experience doesn’t mean a paycheck.

    Many of these Labor Laws were put in place to protect the student’s from harmful situations. Again, these laws need to be re-written and stated more clearly. I’m sure most parents, professors, and students would be so excited to take on an opportunity like the one you’ve described. It’s a shame that these requirements come in the way of that.

    I’m personally a huge advocate for unpaid internships. I had 15 of them throughout college and only received a $100.00 stipend – once. They helped me learn about myself and my career path. They were invaluable and, as you can see on my website, I always encourage students to consider them. I also think it’s possible to manage an unpaid internship, job, and schoolwork with the right preparation and focus, see my blog on how to manage an internship and a job – http://internqueen.wordpress.com/2009/03/23/how-to-manage-an-internship-and-a-job/.

    My advice, would be to hire one person to head up your new division/sports media department and bring on a team of interns to help that individual. You could even take an existing employee and put them in charge of this new division. That way the interns aren’t directly responsible for any incoming revenue, they are simply assisting and learning under the watch of someone else.

    Another idea is to take any existing interns from your organization and give them an “intern project” to work on for the semester. Many large formal internship programs have projects that the interns are responsible for. These projects aren’t to gain revenue but to really let the students think for themselves and learn how to put good ideas to great use.

    I also blogged on why students should take unpaid internships: http://internqueen.wordpress.com/2009/02/19/students-should-take-unpaid-internships/

    Thanks for bringing more attention to the subject of internships.

    Lauren Berger
    “The Intern Queen”

    Comment by internqueen -

  42. I believe if a person seeks an internship to get experience in their work field, they should be rewarded, not punished.

    Sure there are other jobs interns could do on the side to have some form of income.. like waitressing, babysitting, house cleaning a.k.a. jobs that dont require a college education.

    But taking classes and doing an internship, plus working a part time job is very consuming.

    I say PAY the people who want to learn, who attend college, who show ambition to get an internship and who want to move up in their career field.

    This way it will provide more jobs for people that refuse to go to college and are satisfied making minimum wage waitressing, babysitting, house cleaning.

    Comment by x0vanityfair0x -

  43. Mark – what if you made it a contest with season tickets as the prize – for the “pool” of those who bring in cool rocking new video/posts…. I personally worked 40+ hours at my first internship free – eons ago – loved every minute of it and now am a successful public speaker/ communication consultant… no horrid after effects!

    Is the incentive illegal too?! Seems to me it would be a promotion!

    Comment by Lynne Jarman-Johnson -

  44. Pingback: Unpaid internships: hindrance to social change? « nonprofit provocateur

  45. For once I completely agree with you.

    Comment by zbair2000 -

  46. That’s terrible. Every student, especially in this economy should have the opportunity to do anything they want for free.

    My company is trying to help this process along in Canada. http://www.worklauncher.com. I guess we’ve got some hurdles to overcome before we can do a lot in the US.

    Have a look at this article, it sheds a little light on how you might be able to use unpaid interns.


    The issue of ‘not creating value’ for the business sounds like a fine line, and a hard to enforce one too. Therefore I’d think that the practice of hiring unpaid interns is better suited to smaller companies, as bigger firms seen constantly using interns for free would become targets for litigation.

    Thanks for bringing this up.

    Comment by worklauncher -

  47. Mark, I dunno that I’d call you an “entrepreneur”, even if you act in that role on occasion. It’s semantics, sure…but common usage implies someone operating from a less than fully capitalized position. That’s not a position you will ever find yourself in again.

    I suppose I’m pointing that out to present a line people are going to draw in the sand. A small company struggling to make ends meet, burning the candle at 4 ends and desperate for some help to launch their product or service – yeah, I think your average response would look different to the question of unpaid intern. It’s not right. I agree. I’m merely illustrating how/why perception matters in a matter such as this.

    Where I think the government and the critics of this get it wrong is in the implication that value to an individual comes *only* in the form of money. Money helps, yes. “Experience + money > experience only = true”. The question is more, IMO whether “experience with no money > money with no experience = true”. I have a wife and two kids and in/for my life, I MUST maintain income. I would not be a candidate for Mark. But if things were otherwise I would absolutely prefer to spend 6 months gaining experience than 6 months making low money that leads to nothing better in the future (ie. fast food).

    In this case, the government feels it knows better than the individual what is of value to the individual. I know, I know…government does that all the time…but in this case it’s different from telling me I must wear a seatbelt in my car. In this case, its telling me I/we/you should manage a Dairy Queen over working for Mark Cuban for free for a period of time, if those are the two options. That’s intrusion into my life I feel unwarranted. It should be my choice. Now, I can understand the government saying I cannot accept an unpaid internship AND collect unemployment. That puts the burden of my choice on the tax payers. That I get. Just don’t tell me where and how I can or cannot work, where the choice affects no one but myself.

    Comment by tommyzib -

  48. I think you have to look at entire industries–sports in particular–to understand why a law like this might be necessary. The internship you described sounds great, and any intern would be better for the experience. But far too few sports internships offer that level of tangible industry experience. For every position like the one you described, there may be five that consist of making coffee and pushing paper. No one has a gun to his or head to take an internship; but if they want to work in sports they do, because unpaid/low-paid internships are positioned as something everyone has to go through. That seems more like hazing than professional training.

    Compare it to a medical residency. Residents do yeoman’s work for relatively little money. Yet when they complete their residencies, they have the tangible skills to practice medicine. And the residency programs are held to defined standards to ensure a relatively fair value exchange. You can’t say the same for the sports world.

    I don’t doubt that unpaid internships can be incredibly valuable experiences. But unless all teams/leagues commit to their interns as much as the interns commit to them, then labor policies like this one might be an unfortunate necessity; the “work that is of no value” part seems bizarre, but it might just be a poison pill to discourage the practice.

    Comment by nuseph -

  49. There is a solution for what you are looking to accomplish, but it will need to carefully be done. In short, establish a 501(c)(3) non-profit which is aimed at accomplishing some greater-good goals. Look closely and you can see some in this business model. Then the non-profit enlists volunteers to help accomplish its goals. Yes, it means giving up a bit of control and ownership, but in the longrun it can do what you wish to accomplish effectively and more.

    Comment by stegermi -

  50. You can always ask Nancy Pelosi the question?

    Comment by montbaldy -

  51. very good

    Comment by baldoc1 -

  52. I did an internships when I was 19 in 1976. I started my own business and interned for at least 5 years before my boss (me) gave me the okay. No money, no know-how no nothing but determination do make my own way. I wouldn’t trade that for anything. Now if the gov would encourage entrepreneurship by way of training, financial incentives, less taxation and realize that small businesses keep most of this country employed, then maybe we wouldn’t have so many people standing in line waiting for a freebie.

    Since I got officially “unemployed” 1976, I’ve had people ask me to teach them to do what I do. I just tell them to go out and start a business. No, no, don’t ask Mommy and Daddy for help, if you want to be something significant and learn how to survive, you gotta do this on your own. You have to starve for a few years, work your ass off, embarrass yourself, do things that aren’t meant for the human psyche, you know… stuff that builds character. Plus learn how to deal with people – idiots and good ones. And here’s an important one…learning how to get out there and hustlin’ for your meals. If you learn how to do that, you’ll go from wimpy intern to a something cool.

    Once you live through the craziness of building a business into t a self-sustaining entity, then you’ll be ready to take on small piece of the world. Anyone can go work for a boss, but it takes real guts to get out there by yourself and create something of value through working right. A business that contributes to society, one that proves you don’t need the stinkin’ government telling you how life gets done. And once you’re near the top, you can then tell em all to “f” off. This is your gig, do it your way.


    Comment by mikeysasylum -

  53. Pingback: Real Education vs Paper Education or Internships and the Minimum Wage | Come, Let Us Reason Together

  54. Mark’s HR representative is mostly correct. I handle labor and employment cases in California, and I tell my clients never to hire an intern unless they go through an authorized college program. My situation is unique b/c I run my own business (I am a solo practitioner), and I also prosecute other businesses for employment violations. As such, I can see both the pro-business and pro-employee sides of employment issues.

    Mr. Cuban and the minimum wage supporters are both correct. Mr. Cuban is correct in stating that potential employees have lost an opportunity b/c of the law’s expansive liability. The min-wage group is also correct when it contends that unpaid internships favor affluent and middle-class children who can afford to work without pay for some time. One can hold both positions without any contradiction.

    Mr. Cuban, however, weakens his argument by refusing to acknowledge that internships favor more affluent kids. It is true that a poor kid from the ghetto could work two or three jobs–something Mr. Cuban did–and use public transportation to get valuable experience, but the overwhelming majority of the participants would not fall into the aforementioned category.

    Mr. Cuban contends that it is not impossible for poor kids to participate and benefit from unpaid internships. Again, true, but when the overwhelming majority of unpaid interns are not poor kids or are supported by parents, it should be clear that unpaid internships tend to discriminate against poorer students, adults, and teenagers.

    What is the solution? We need to revamp our entire educational system. Most education in America is no better than government-subsidized babysitting. When you compare American high school graduates with high school graduates from India, Pakistan, Iran, Israel, Norway, etc., the differences are stunning. Many international students specialize in a particular area and are familiar with a particular field when they graduate high school or college. American schools, in contrast, refuse to track students, equating “tracking” with stigmatizing. Other countries have no such qualms, which results in a less egalitarian, but more workforce-ready society.

    America’s biggest problem (and positive) is its idealism and the idea that all students must be educated. Other countries dispense with such idealism and weed out underperformers from colleges and even high schools. Such a system will not go over very well in egalitarian-minded America until we realize we are failing our children in an increasingly globalized economy. The Bill and Melinda Gates Foundation is doing some wonderful things with charter schools, but it’s not enough. Teachers’ unions–which represent teachers, i.e., government workers, not children–are very powerful and will resist any educational overhaul.

    Ultimately, if you want to blame someone for our unfair economic system, which favors rich kids and penalizes poorer kids, blame the American educational system and the teachers’ unions. An American high school diploma and college degree mean nothing these days. Think about why our degrees and diplomas have become worthless in proving workforce readiness. (Hint: it isn’t because of Mark Cuban.) Think about why employers want to see people work on the job before hiring them as employees. Think about whether an unpaid internship is useful in determining whether an employee and employer may find each other mutually beneficial. Ask yourself, “Does a person’s willingness to work for free indicate dedication and long-term interest?” Also, remember that no one is saying that the intern’s unpaid status should be permanent or long-term–I think Mr. Cuban is saying that an unpaid internship is a _short-term_ “trial” period to determine whether a particular project or worker is capable of generating revenue for both the employee and the employer. In any case, don’t blame Mr. Cuban for trying to find hard workers. He’s just a realist, not a blood-sucking capitalist.

    Matthew Rafat

    P.S. Mr. Cuban, you did not provide any detailed examples about how an intern can maximize his or her experience as an unpaid intern. Such information might be useful to many of your readers.

    Comment by auden5 -

  55. Before I consider whom I should sue first, my past mentors or the current administration, I guess I should offer up a toast to all the lawyers who earned their pay by filling a crack in the rim of the wage equity teacup while drilling a hole in the bottom.

    Comment by mdavidgreen -

  56. From MC> Actually the other side of that coin is that entrepreneurs and businesspeople cant afford to just throw capital at risks. Some risk are obviously worth taking, others are obviously not worth doing. The other 99pct are in the middle somewhere and you try to optimize your chance of success for the business and for all those involved.

    Me:I thought capitalism was /exactly/ about throwing capital at risks. If its not about risk, then how do you justify such large rewards for people such as yourself (and hopefully one day myself too)?

    Yes, you try to optimise your chance of success, but you have to do this within legal bounds. I’m sure you wouldn’t use that argument to justify collusion or cartels, however the logic would fit just as well.

    If a project can /only/ succeed through the use of unpaid labour then doesn’t that imply that its not such a good idea in the first place?

    You say that unpaid internships should be allowed to increase freedom, but doing so also impedes the freedom of people to choose their own profession regardless of background. Merit should be the only qualifier. There are certain professions that you cannot get into without an internship, and huge numbers of people are priced out of professions they would be very good at.

    Comment by angusprune -

  57. The law is smart. You were looking for their talent to benefit your vision. Pay up.

    Comment by houstondivas -

  58. So what? Then pay them. A nominal stipend to get around the law. Done.

    Can I be your new HR person now?

    Comment by tdhurst -

  59. I spent 20 years in Federal Employment and Training, and #4 is correctly identified as the problem. But the real problem is that your HR person is interpreting this way too strictly.

    Immediate benefit is the key. You aren’t making money from what the interns would be doing. You aren’t benefiting from it as an organization. And they are.

    For example, we used to run internships for handicapped individuals to learn the restaurant business. The supervision needed and training necessary was more than they would produce for teh restaurant.

    As you’ve already stated that there is no immediate income from this, then there is no immediate benefit.

    You need a smarter HR person.

    From MC> My HR person didnt make the decision in a vacuum. We talked to others who had the same position. Plus, im not going to take the chance. As I have learned , the only reason someone in the government needs to come after you, is that they want to.

    Comment by hroeder -

  60. I’m not sure that my points are already covered… I don’t use interns because of the cost to the company to lose trained people. I agree that you ought not to use interns for altruistic means, and it doesn’t sound like you’re just doing something for the good of mankind… either the business receives direct or indirect (goodwill, on-the-job evaluations, testing a concept, etc.) value or you don’t do it.

    I am constantly asked by potential investors why I don’t use interns for particular things and I explain that I take a long time to train people and I don’t want to lose that value. But the fact is that these investors just presume that the tech companies they invest in are getting free work from interns… and it really is true that they’re doing that. There’s no guarantee that what you hired the interns for will make money, but what aspect of your business does have guarantees?

    If you consider that most of the unpaid interns (‘volunteer’ is a difference of form and not substance – you sold yourself for a less valuable and savvy resume description) are not in high profile positions with the potential you describe, you must be able to see that there’s a lot of room for abuse, no?

    I was floored years ago when I first heard of the concept of the unpaid internship. Left unattended, they would become far more prominent and start to last for longer periods of time. I can’t see how it’s anything more than exploitation and I give the government tremendous credit for an extremely well articulated policy. If you take the market concept further, you’ll see that pretty soon (if not already) companies will stop valuing unpaid internships on resumes. If you’re someone considering doing one of these things… go out and try to start a business instead… it’ll cost you about the same and you’re much more likely to learn something of value.

    Comment by Nick Oliva -

  61. Your point is well made. But c’mon Mark, you’ve got a quarter million to spend on complaining about the refs, surely you have $8 an hour for some college kids!?

    Comment by rothav -

  62. Pingback: Unpaid Internship is Illegal — Ben Atlas

  63. This line by Seth Godin should help clarify some thinking for commenters who insist Mark is way off base here:

    “Isn’t it odd that we’re willing to spend $300,000 to buy an accredited but ultimately useless academic line on our resume, but we hesitate to do a month of hard work to create a chunk of experience that’s priceless?” – http://sethgodin.typepad.com/seths_blog/2009/08/free-work-vs-internships.html

    Mark should just start an institute of higher education focused on social media and charge tuition over four years. Probably get some government funding in the process too. That’s where the real money is.

    Actually, that probably isn’t sarcasm.

    Comment by stormyshippy -

  64. Spoken like a true capitalist pig, Mark.

    The intern is usually a middle class, college-educated individual with aspirations to enter into a profession. The internship is viewed as a stepping stone into a career that will eventually pay six figures, hopefully. And the reality is that job competition is FIERCE. So taking 4 months when you’re still on daddy’s dime to get some experience seems like a good deal. In all honesty, that person would probably be sitting at home or on vacation during the summer months, anyways.

    Management gets free labor. Let’s not lie, that’s what it is. It’s simply free labor, fresh ideas from the “next generation” and hopefully, some tangible profit. If one of those 20 interns is able to generate profit, they’ll get hired and get some benefit. The other 19? See ya later with a “letter of recommendation” and a few lines for your resume.

    The government’s role is to regulate this. Is 4 months of free labor equivalent to 4 lines on a resume? The government, being an institution for the people says no. You, being a hugely successful businessman in a capitalist society, say yes. Thankfully the government is who makes the law, not you.

    From MC> oink, oink. The same is that the government thinks you are not smart enough to determine whether the 4 months is worth 4 lines. There are a lot of smart people who can turn the value of those 4 months into much more. And there are others who are smart enough to recognize that if the value is not there, they should walk away. Others still will take the job and leave quickly. Why stay very long if you arent getting paid and you arent learning ? The real losers are the individuals who have the brains to learn from an opportunity and leverage it into something more. I have been in situations with interns where i wanted them to stay, but they wouldnt. For any price. They told me they got what they needed from the internship but they now have a better way to use what they learned. Away from my business. Others have started their own companies. Thats what smart people do. They make decisions on how to best position themselves to reach their goals.

    I can promise you that there are quite a few people out there that can create more value from an internship than the (sum of their hours x minimum wage)- taxes. Many will take a 2nd job to pay the bills in order to put themselves in that position. Just because some cant doesnt mean our government should keep the best and brightest from putting themselves in a position of their own choosing. Thats ridiculous. Thats also a net negative for the economy and the future of this country

    Comment by loucons -

  65. Mark, from your individual, single-case standpoint, this doesn’t make sense, I understand. But when you think about this issue from a “public-interest” perspective you should be able to see the government’s view making sense.

    When applied on a mass-scale, this law protects the inividual from the abuse and blood-sucking of capitalists who will stop at nothing to maximize their profits. The operative word here is “mass-scale”.

    If the government opens the doors wide for this natural imbalance of working for nothing, FREE labor? Common, that’s the dream of every capitalist!

    From MC> Actually it tells us that the government thinks we cant think for ourselves. No one forces anyone to take an unpaid internship. But those who want to make an investment in the internship cant. Its a productivity killer. There are dozens of way to do this better. Limit the term of the internship to 1 year for example. You can pay for an education, but you are not allowed to get one for free. Thats what it comes down to for people who can make decisions for themselves

    Comment by Saleh Najar -

  66. Mr. Cuban,

    I can understand why you have this opinion. I know that your person success has come from hard work, making smart decisions, and being in the right place at the right time. No one can argue that you haven’t earned it.

    But let us be realistic – your story is a one in a million (obviously, or there would be more billionaires in the world). Not everyone can afford that risk. And not every gamble pays off. It must be an AGONIZING decision, deciding whether or not to take an unpaid internship. A lot of them are in cities like Washington DC, Los Angeles, or New York City, and often lead to jobs which don’t end up paying that much anyway. The debt that an intern would incur cannot be written off as a necessary risk people should be willing to take. There are so many unknowns involved – is this the right company, what are the odds of actually getting a paid position later on, what if the person has to leave halfway through the internship because they ran out of money? One failed unpaid internship could close the door to other opportunities in the future. These are questions that cannot simply be dismissed as the cost of trying to make it.

    From MC> Some companies build in the programs as a cost of doing business every year. They arent startups. But Im willing to bet that those programs are also the first to go in economic times like this. Ive worked for free and had a 2nd job at the same time. You plays the game you takes your chances. Thats real world

    I recommend that you read Malcolm Gladwell’s book “Outliers” (your buddy Bill Simmons will back me up on this). The point of the book is that success is not simply a function of “sweat equity” and intelligence. A your socio-economic background from has an enormous effect on the opportunities you have – corporate America is NOT a true meritocracy. I think that the purpose of this law is to level the playing field a just a little bit. If internships have to be paid, it makes the decision to take it a little more equal for everyone (and thus our success a function of our talent).


    PS as to your earlier comment about the company risking money on an internship program, my question is this: if it is such a risk, how come some companies have well established, unpaid internship programs that continue year after year? Surely after the first few years the company would have a reasonable idea what the risks are? I think that the issue clearly is not one of risk to the company, but an imbalance of supply and demand.

    Comment by timqi -

  67. Mark,

    As always another great post which raises awareness on many levels.

    In working with unemployed in the East Bay, CA area we have been hit hard by the failing auto industry and other failing economic sectors which has led to an abundance of very [VERY!] talented people going without jobs. It is a “buyers market” for sure as many job seekers are accepting offers well below their previous standards or in other sectors in an effort to “just get by”.

    Internships have traditionally been an opportunity for individuals to begin a relationship with a company to see if it is going to be a good fit. By limiting these opportunities it has shown to be a hindrance in getting our economy back on track.

    My question is this: The New York times recently wrote that we may be headed to a jobless economic recovery [http://www.nytimes.com/2009/09/05/business/economy/05jobs.html?_r=1&th&emc=th]; if this is the case, will the economy really be able to sustain itself?

    Mark Montoya




    Comment by markmontoya -

  68. Mark, you’re acting ridiculous, like a petulant child who wants a toy but doesn’t understand someone has to pay for it.

    You’re EXTREMELY WEALTHY. Maybe YOU can afford to work for free but most of us don’t have the financial security that you do. As the owner of multiple successful businesses, you CAN afford to pay employees their just wages, and if you had any ethical sense, you would feel OBLIGATED to pay people for their employment.

    Here’s a clue, guy – I don’t care how rich or well connected you are, that doesn’t make being near you worth giving up my ability to make an income, or my RIGHT to make an income by providing my labor to someone LIKE YOU who is profiting from it – let’s be honest, if you didn’t see a market value in something, you wouldn’t participate in it.

    As a student who is in the position to require internships, there is no bigger exploitation in the youth job market than unpaid internships. If you can’t afford to pay them but think you need them, fix your business model. If you can afford to pay them but think that the ‘experience’ is payment enough, you should have checked your ego at the same door where you left your ethics.

    Believe it or not, young workers are not here to bask in your glory and be awed by your presence. We’re here to survive these days, and get ahead of if at all possible.

    Your ‘opportunity’ to volunteer for a BILLIONAIRE BUSINESS MOGUL who would profit from the labor of his volunteers needs a reality adjustment. If that’s all you can offer us, keep on walkin’, we certainly don’t need you or anyone like you, Mark.

    From MC> Very kind of you to call me names. Very nice of you to try to dictate how i should spend my money. Maybe you should take a business class to understand how financial risk vs reward decisions are made ? And to understand what “fix your business model” means.
    You didnt ask,but since this is my blog, my suggestion for you is to do a slow 360 and look to see if there is a gun to your head. If not, feel free to make your own decisions and let others make theirs. I can promise you that there are people who paid to go to school and realize that although there is a preference to get the right job at the right salary, when that option is not available, its worth trying to continue their education. Without having to pay for it. I dont have any doubt that an unpaid internship in your chosen field can teach you more and cost you far far less than going back to school to get an advanced degree. Unfortunately, the choice is no longer available.

    Comment by chaosmotor -

  69. Setting aside for a moment whether it is a good idea to try to enforce this rule, I think it is poor business practice to have unpaid interns. I am prejudiced against the practice to the extent that when I see an unpaid internship on someone’s resume, I even count it against the intern in addition to the business.

    The economy can only grow from where it is now by increasing efficiency. If having to pay someone to twitter about the Mavs gives you a pause, then maybe twittering about the Mavs is not a productive activity. (It might be entertaining, and worthwhile in some sense, just like going to a Mavs game and talking about it afterwards with your firends is worthwhile; but it is not economically productive.)

    Those people you were going to recruit to promote the Mavs will either a) do it anyway or b) rightly and correctly seek out some activity of economic importance, whether it be gathering aluminum cans or picking agricultural produce or flipping burgers. Or maybe both, they will twitter about the Mavs on their smoke breaks at McDonald’s.

    When a business has interns about, it poisons the business focus. People spend time thinking up stupid shit for them to do, instead of thinking, “Joe the new college kid is getting paid $7.25 and hour, that’s $58 a day, is it really worth it to have him doing X ? Should we have him do Y instead ?” And in those kinds of thoughts, is the heart of the economic engine that makes the world go round.

    It’s also poisonous to the attitudes of the interns. It distracts them from the pure and enlightened principles of capitalism, and into these weird notions of “connections” and “paying your dues” that have more in common with aristocracy or fraternal orders than how money is made. The interns need to be being taught to think at the end of each day, “did I benefit the business by $180 or more today ? If not, given overhead and etc, they probably won’t keep paying me $60 a day, and I certainly won’t be getting a raise.”

    I also hold the opinion that we would do well to return to some apprenticeship type systems, and that some trades or even professions are probably better taught that way, including my own occupation of computer programming (given some basic background in math). However, unpaid apprenticeships are not acceptable; a master who cannot derive a decent day’s pay by directing the apprentice has not yet risen to the level where he should be considered a master.

    From MC> sounds like you worked in some messed up places. I assure you that whether or not they were paid will not impact the quality of their management or how they use their time. Smart people will use the internship to their advantage, whether intern or management

    Comment by robgr -

  70. Since the media pool would be distributed for free, you’re probably hoping to generate buzz for more ticket sales, product sales, or possibly monetizing some of the media pool products.

    Still, at McDonald’s, you show up, watch videos, cook burgers and get paid.

    Treat them as owners of the buzz or content they are creating. They as group (make them equal owners of a partnership, think Paul Allen and Bill Gates in 1975 in Albuquerque!) would create the buzz and the buzz products, they would understand, maybe by contract, that they must sell their buzz products ONLY to
    Mavericks or Mavericks subsidiaries exclusively, and Mavericks corporations do not guarantee that any products will be purchased and used. They produce something good, and you have 30 people in the Pool Partnership, then they share what they earn 30 ways equally. That’s one option.

    Another option, which I think is very legal, is to put them on the payroll as Administrators, as FDR did with his $1 a year people during his Administration.

    Pay each administrator a small sum, maybe $10 or $20 a month. They would receive that regardless.

    If some of their buzz products are marketable and earn income, then give them a chunk of the revenue, I don’t know, maybe 20% of the profits PLUS the invaluable experience they are gaining.

    They aren’t making burgers, but chances are, if you treat them right, they will hustle and come up with things that make you and everyone ion your organization proud!

    I remember the song: Money for nothing, and the chicks for free. Gosh, Mark. Don’t let it be: Money for nothing, and the interns for free. Surely, you want to do better than the US Senate?


    Comment by eltucson -

  71. Why do you want to filter the pool of applicants to do this job down to only the people who can afford to work for free? Plenty of candidates that would be excellent simply wouldn’t be able to comply with your ridiculous salary demands that you have no fiscal reason for requiring.

    From MC> because its worse to hire a group of people knowing you are going to have to fire them all in 6 weeks if they dont generate a return on the investment. There will always be a cost to starting any business extension, but if you keep it to a bare minimum, you can take longer to grow the business. If it does work, then the interns are in a great position to get a return on their investment of time and brains by getting a job out of it.

    Comment by dterrell -

  72. Pingback: no third solution » Blog Archive » Unpaid Internships: Illegal?

  73. So let me get this straight, a multi billionaire, owner of a successful NBA team can’t pay interns? Come on the towels and Xbox games you buy for your NBA players cost way more than a yearly salary for any intern.

    Comment by brutius -

  74. Would it have really been that difficult to pay your interns minimum wage? Preventing the exploitation of workers is why we have minimum wage laws in the first place, it doesn’t matter whether your business is a dazzling sports team or a lowly burger joint.

    From MC> Are you kidding me ? exploitation happens when the subject has no choice. No one forces anyone to take an internship. Furthermore, if someone doesn’t have the intellectual capital in place to make an informed decision about taking the internship, we dont want them

    Comment by Jeffrey -

  75. Mark,

    The other side of the coin is that not everyone can afford to do an internship. Not every parent can support their kids for months at a time to do an internship. Not every bright kid has the savings to support himself.

    In the UK bright kids are being turned off from careers they would excel at because they can’t afford to live for 12-18 months without earning any money. It is a modern class system. It entrenches certain professions as middle class as only middle class kids can afford the required internship.

    Perhaps there is another way round this, have the state support people in internships – but that is equally fraught with difficulty as the government would be paying /your/ interns for /your/ benefit.
    This isn’t as simple an issue as you make out, especially if you believe in meritocracy and leveling the playingfield for everyone

    From MC> Actually the other side of that coin is that entrepreneurs and businesspeople cant afford to just throw capital at risks. Some risk are obviously worth taking, others are obviously not worth doing. The other 99pct are in the middle somewhere and you try to optimize your chance of success for the business and for all those involved.

    Comment by angusprune -

  76. @dondodge:

    If it is “not a sound business decision,” he shouldn’t do it. Period. If, on the other hand, it has a *risk* of not working, that’s really the role of entrepreneur: deciding what risks are worth taking.

    What you are suggesting is that the “interns” shoulder the risk. If it pays off, there’s a good chance that he may actually start paying them (something less than they are earning for him). If it’s a loss, it falls entirely on the “interns.”

    That’s not how it is supposed to work. The reason the low-level employees don’t make the big bucks is because they have no interest in shouldering that risk. By making them do so–as with required unpaid training periods–you are unfairly profiting from your position.

    From MC> not quite. Its going to vary from opportunity to opportunity. The reality is that there always risk in any job. Paid or unpaid. There is always risk in any business endeavor. If someone has no interest in shouldering any risk. They should never take an upaid internship. Ever. Find something else. On the flipside, if you are smart and get a little lucky, your investment of sweat equity into a business can pay off huge dividends. It may be a job, or in the case of Broadcast.com, we had several unpaid internships (some with other barely paying jobs) that were converted into jobs, which earned stockoptions which were worth millions of dollars when we sold the company. All because someone had the foresight to “shoulder some risk” and invest sweat equity.

    This approach isnt for everyone, but its an opportunity for many that has been eliminated

    Comment by halavais -

  77. As someone on the intern side of the equation, it’s immensely frustrating. Most sports and media firms will only hire unpaid interns because they don’t have big budgets and demand far outpaces supply for these positions – so companies have power. To legally enforce this, companies require we receive college credit for the internship, a different form of compensation. Obviously, Mark can use that tact to start this venture.

    The law is perverse because it forces students or unemployed workers, the people without money, to actually pay to work. Schools can help students get around the policy by “faking” the credit portion, but that does not change the fact the government is completely wrong.

    In a completely free market employment system, companies will become more efficient and innovative by gaining access to the best employees. While workers will have access to invaluable experience, making them more marketable and naturally creating paid opportunities in the future.

    Comment by mjsenno -

  78. Mark doesn’t want interns. He wants employees or at least he wants people to provide work for free. Mark wants someone to “acquire video, write game reports, track unique stats, do interviews, interact with fans, and then compile all of this incremental media and provide it free to any and every outlet we could think of.” And, of course, Mark wants to financially benefit from this–but not these workers.

    The work product of these interns will be licensed and protected to Mark’s benefit, right?

    I don’t wish to tell Mark how to spend his money, but it seems to me he might be able to personally take on the risk and guarantee these folks the minimum wage and never even notice the cash was gone.

    The essence of internships is they’re about training. Mark wants workers not trainees. Calling these people interns only subverts the meaning of that word. When the interns are ready to be paid Mark reserves the right to ditch them and find someone else to work for free. They will be the trophy brides of industry!

    I have personally supervised college age interns for over two decades. Even when they’re doing some of the functions of my job, they’re doing it under my immediate supervision. It’s a pain-in-the-ass for me to have interns. It slows me down. It costs my boss productivity (a little–not a lot). It makes my job harder when I work at their speed. My view of the importance of my finished work product is more long term.

    I supervise and train interns because I’d like to have a hand in shaping the next generation. It seems the right thing to do. I do not personally benefit. In fact these college kids grow up and compete against me in the job market.

    What Mark wants is a free pass around the minimum wage laws. Though I don’t agree, if that’s what you want (and certainly that’s what you’re advocating) work to get the law changed.

    I suspect Mark is redefining the word intern because unpaid workers doesn’t sound as nice. What about the other obligations employers offer their workers, like workman’s compensation? If an intern gets hurt, who is responsible?

    You can put lipstick on a pig. It’s still a pig.

    From MC> Actually, I did nothing. One intern from last year got a job to continue what they were doing. But no one else was added. The media was not expanded. No one got an opportunity. So those people we would have brought on as interns are still out there. without the opportunity. Thats the way the real world works. And as far as working to get the law changed. Nothing disgusts me more these days than dealing with the government.

    Comment by geofffox -

  79. Okay, so why not just call it a salaried position, and pay like $5 or $10 dollars/week or something?

    I mean I think you’ve got the Letter of The Law nailed, but why not just elegantly step around it? Interns could use a Jackson a week.

    Comment by geedeck -

  80. Welcome to 2009? This law has been on the books for years, at least since I was going through college. You’re an entrepreneur, work around it. If the interns were legitimately adding value, you should compensate them in some way. If as you claim it is really just going to be a revenue hole, then they aren’t really creating value, and this doesn’t apply.

    Is this work really not worth even minimum wage? And there is no way you can tweak the concept so it becomes worth that? This whole post just seems poorly thought out and driven purely by emotion. There is a good reason for the law. Workers should not be exploited. Any business worth their salt can find a way to get enough value from interns to pay them minimum wage, even if that benefit is in the long term.

    Comment by hollywoodmontrose -

  81. Come on man…..I think unpaid internships are a joke. To get “experience”? Come on. That is one of the lamest things I can think of. You are promoting the Mavs and you wouldn’t have to pay for it? I think of what you pay the players….and yet you are complaining about having to pay an intern?

    Comment by iowacyclone -

  82. I’m a college student here in Georgia. I’m in school to become a teacher. I literally have to PAY to do an UNPAID internship as a full-time teacher for 18 weeks. I understand the school system does not have enough money to pay prospective teachers, however the school system will benefit immensely from having my hundreds of hours of free work.

    I don’t even think I should be getting paid. I’m not even griping about having to do my internship (because it will be an opportunity to try some things out in the classroom while having an experienced teacher guide my through some of my future failures). I just fail to see how me paying to do an unpaid internship in education is fundamentally different from doing an unpaid internship in the private sector.

    I fail to see the logical consistency in this law.

    Comment by mwill160 -

  83. Mark Cuban is more than willing to pay money for value. This is a case where it is an interesting experiment, but not a sound business decision.

    If he could do the experiment with interns then it might make sense to try it. But the laws prevent a good experiment, and people who want to get experience lose out in the process.

    I bet you if the experiment worked and Mark could actually generate some revenue or direct value, he would be happy to hire the interns as employees and pay them.\

    From MC> Amen

    Comment by dondodge -

  84. I agree with the idea of unpaid interns in certain circumstances. However, what Mr. Cuban outlines is not an appropriate use for unpaid interns. They are providing a direct value to the organization that is engaging them and they should be compensated. Using the economy as an excuse is just sad.

    Comment by Ryan Douthit -

  85. My first thought was “What’s the big deal? Just pay minimum wage.” But then I thought about all the liability and paperwork that comes with a paid employee that you wouldn’t have with an intern. Not sure what this law is intended to do. Interns can walk away from abusive or unfair situations. I doubt companies will be hiring new employees for things they envisioned for interns.

    Comment by jerkize -

  86. The irony in this is that if you call your Senator or Congressman to give an opinion on this issue the person who answers the phone is likely to be…an intern.

    I was an unpaid intern for both U.S. Senators from my state. It is a long standing tradition, and a good one.

    People who do internships are getting valuable experience, and getting a leg up on those who don’t have the experience. People who make the effort to do an unpaid internship are likely to be VERY good, hard working, employees.

    Those who demand to be paid for jobs they don’t know how to do…not so much.

    Comment by dondodge -

  87. Pingback: Basketball Blog.com – The Best Basketball Blogs Resource Online » Blog Archive » Want an Unpaid Internship So You Can Get Valuable Experience ? – Screw You !

  88. So, you’ve got a great plan to publicize the Mavs (remind me, is this a not-for-profit venture?) and you are upset that you’ll have to pay minimum wage for that work?

    Of course, you could open up the shop and provide the kind of access to bloggers to do this. You wouldn’t have control over their message that way, but with great control comes pay.

    I guess we could turn this around. The law says that you should only allow unpaid interns to do things without direct value to the company. If what they are doing is of value to the company, then you should pay them. Heck, pay them *less* than the value they are providing–I’m all for profit. But pay them *some* part of the money they will be earning for you. That’s just basic fairness. Corporations start out with far more power than workers, requiring those companies to pay a minimum wage for work done is a very low-pass filter for corporate exploitation.

    @princessmischka I wouldn’t hire someone who hadn’t either clerked or done a summer internship, but then I wouldn’t hire a fresh-out-of-law-school lawyer period. I expect lawyers to apprentice after they are done–license or no. If I *did* hire someone fresh out of law school who had no practical experience, I would expect to pay very little, and to get what I paid for. This naturally extends to other professions as well.

    Comment by halavais -

  89. As usual, the other side of this that you fail to consider is that in many industries — particularly media — unpaid interns are abused to the point that they are viewed as free labor and used to do jobs that the company would otherwise have to hire someone at $40k+ a year to do.

    And, I can’t believe that you of all people is complaining about paying a few interns minimum wage for part time jobs that last three months. Really? Why should you get the benefit of their skills and work for free? Because they get “experience?” in the process? Do you expect any of your college grads to work for “experience” instead of money?

    They get that same experience working for their college tv stations.

    And I hope the labor department sees this and all of your posting how clever you are and how you intentionally skirt the law and get sued for taking advantage of other people to your benefit.

    BTW, I did an internship — and it was paid. $10 / hour.

    Comment by nospecialfx -

  90. Same situation in the UK now Mark too. I have had the same problem. http://bit.ly/3VArKQ

    Comment by djatherton -

  91. I agree with it being classified as a training course and a small fee to participate. You would have to have a paid person on staff to train the group, but that slot would have to be filled with interns also. I think there are a ton of people in the Dallas market that would jump at the chance to take part. I would.

    Comment by Jim -

  92. Mark, The loophole is to start a little nonprofit and, as @Calina suggested, hire these workers as volunteers.

    Comment by Ryan Mahoski -

  93. Can they be called docents or ambassadors like museums, etc. often have? Or is that type of designation left to non-profit organizations? Although, couldn’t you set up some sort of Mavs pride non-profit fan club, etc. and hire them through that?

    Comment by Benjy -

  94. As someone who did unpaid internships while in school, I think this is such a disservice to those who want to be an intern. Sure it’s a little hard because you aren’t getting paid – that’s why I worked a paid job 3 days a week and intered 2. How else is anyone going to get practical experience.

    As a lawyer who runs her office clerk program I get a number of 1st year students wanting a job. But, I won’t hire them and neither will anyone else (unless they are those 10 students in the top 3% of the class) because they don’t know what they’re doing. It’s a waste of my time and money – even at just minimum wage as I end up having to do the work over again myself.

    Sadly, as no law school I know of provides practical experience (ie: how to write a letter to a client or an opposing attorney, how to draft pleadings or discovery) these newly minted lawyers are going to be at an extreme disadvantage. And should they decide to hang their own shingle and take on clients, the likelihood of them screwing up the case and getting sue for malpractice is higher.

    So to adrianlong and geechee girl – I can only hope that when either of you need a lawyer, you end up with one whose ink hasn’t dried on his/her license and they had no practical experience to give your case the advantage it needs as they litigate against a 10+ year veteran. We’ll see what tune you are singing then.

    Comment by princessmischka -

  95. Mark,

    I say you still continue on with the project, but instead of “unpaid interns”, you use volunteers. I volunteer for a myriad of places based on my interests. I use this unpaid time to socially and professionally network and know that putting in this time of my own now, will lead to greater opportunities later. I would definitely jump at the chance to “volunteer” in your suggested program, alas, I have no experience nor interest, but if I did, I would sign up whether it was as an unpaid intern or volunteer. You are providing a valuable learning experience.


    Comment by calliemay23 -

  96. Your first commenter, JonathanNation, has the right idea. Charge a price for your work training program.

    I would rather pay you a training fee to get an unpaid internship, than pay a college big bucks for a college internship class that never meets…so I can get the internship.

    Really, getting experience working for the Dallas Mavericks, learning about new media, getting news business experience is very valuable. Charge for it…and get around these stupid laws.

    Don Dodge

    Comment by dondodge -

  97. I am sure there are ways around this.

    My daughter (Twitter- @LaurenVenegas) recently left Texas for a Los Angeles PR/Marketing internship, Pollack PR Marketing. As a recent Baylor University grad, she accepted the unpaid internship July-Sept. If at the end of September they had an opening and both agreed, she would be offered a full-time paid position. Mid August they offered her a job. INVALUABLE EXPERIENCE!! Events like the Santa Monica Pier 100th Centennial celebration, the Rose Bowl Parade. She misses Texas (even though we are originally from St. Louis) and will return to DFW in January after the Rose Bowl Parade with an AWESOME PORTFOLIO!

    I am getting sick of our federal government’s continued increase in our daily lives! I will let Senators, John Cornyn and Kay Bailey Hutchison know how I feel. Ridiculous!

    Follow on Twitter, both myself @MichelleHopper and @LaurenVenegas as I would like to communicate this internship issue. I will not hold against you the fact that it appears you are a Cubby fan. I do wish you would purchase our Texas Rangers!

    Comment by michellehopper -

  98. I dunno. I get why this law exists.

    I see how it can be a good deal for college students who are getting credit and relevant experience (provided they don’t have to worry about paying for school – which is not always the case).

    Employers do this because they have more to gain from the situation than the intern (otherwise it would be a silly business decision). To work for $0 an hour just to potentially land a job in “entertainment!” or “sports!” usually paints you as a sucker and drives the rest of the people in your industry down by showing that certain services aren’t worth paying for.

    Maybe you’re looking for volunteers.

    Comment by drewkarl -

  99. Mark,

    The labor laws are stupid, but there are ways around them.I have experienced this first hand with my son who just graduated from high school. This summer he had a GREAT summer internship (unpaid) with a high profile Hollywood celebrity who has a film company.

    Small companies, like the one above, don’t have HR people and lawyers so they don’t know about these stupid rules. We just did it. Don’t ask, don’t tell.

    In September he started another unpaid internship with a major Los Angeles TV station. They required that he be enrolled in a college class and earning college credit for the internship.

    In both internships he was/is doing work that benefited the company, working along side paid employees.

    So, even though he has no intention of going to college for at least a year, we had to enroll him and pay for a college internship class (3 credits) so that he could get the very valuable, but unpaid,experience. The TV station HR person said as long as he was earning college credit they could use him.

    Crazy, but we were happy to pay for the college course in order to get the valuable unpaid internship.

    BTW, the college where we got the internship told us that Conan O’brien has over 30 interns. It is common practice in the entertainment business.

    BTW2, how are you (the business) getting any value out of these internships if there is no revenue?

    These labor laws are a sad over-reaction to unions complaining about interns doing work that union peole want to preserve for themseves.

    You have a great idea there. It would help people get valuable experience, and provide great content for the world to read and see. Go for it!

    And, my son would like to be your next intern.

    Don Dodge

    Comment by dondodge -

  100. I don’t have a problem with not using interns. I think people should be paid for their work. If they don’t have experience then they get much less, but even so – no one can live on an unpaid internship.

    As someone who works with the entertainment and service industries, I know this is a special strain on already tight budgets these days, but it is good practice.

    Comment by Geechee_Girl -

  101. Pingback: The Smattering › I learned something new about Internships

  102. I agree with the government. Work = pay (ie cold hard cash) period. If you aren’t willing to pay they would be better of at Mcdonald’s or hell a paper route where they can get experience and a paycheck.

    Comment by adrianlong -

  103. Law of unintended consequences strikes again!

    Minimum wage is one of the first things taught in any economics class yet time and time again we feel compelled to legislate wages. To your point Mark, I had an employee ask me what’s more important: education or experience? Without flinching I replied experience; we need more producers not pontificators of how to produce.

    I hope to see your paid and unpaid interns on the market. I’ll hire them!

    Comment by levispires -

  104. I am shocked (well, sorta) … but two thoughts come to mind:

    1. independent contractors/joint ventures/etc – You could make your media pool independent contractors where their pay is a percent of the revenue (or something like that). Maybe set up the media pool as a independent company (or even not-for-profit) as some shelter. There might be more issues with this in your setting.

    2. Sell the training – let the people who would be your interns purchase the training they would receive by doing the job. It could be $1 for the package for 6 months of training by doing the jobs you wanted the unpaid interns to do.

    Again, there are probably laws against these two ideas, I don’t know and am not a lawyer, just thinking on additional ways to get the desired results, but also fit within the rules of the game.

    Comment by jonathannation -

  105. If there’s no friggin’ value to the organization what’s the friggin’ sense of bringing an intern on? Thank GOD the govt. doesn’t have the manpower or resources to enforce this! Then again the bigger you are the more liable you are so I wouldn’t recommend you skate around this Mark! As for me and the little film co. that could…

    What about revenue sharing? if an intern receives a negotiated percentage of profits (if there are any) wouldn’t this be similar to a lot of sales jobs? Could a group of ‘interns’ be recruited to work on a new development venture with the potential of creating a revenue stream under a collective percentage for the ‘interns’ to divvy up in the event revenues exceeded cost?


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    Comment by milesmaker -

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