Pattern of unpaid labor threatens to further undermine job market

A growing number of businesses have figured out that a large pool of idle workers allows them to create unpaid positions in the guise of internships. The federal government has suggested changing regulations to stem the pattern, which could undermine wages and employment long term. Specific rules created by the labor department concerning unpaid internships might be rewritten to prevent the number of companies exploiting unpaid labor from damaging the labor market. Source of article - Trend of unpaid labor threatens to further undermine job market by MoneyBlogNewz.

Pay nothing for a worker

College graduates are not the only ones trying to get unpaid internships right now. You will find many seasonal workers starting to join the about 14 million unemployed while only about one sixth of them have jobs. It is simple to figure out that workers are being exploited in all areas where they are working for free to hopefully get a paying job by simply going on to Craigslist even though you will find unpaid labor official statistics. unpaid workers can gain valuable experience, references and avoid a glaring gap in their resumes, but some companies get what they pay for. Without careful screening, unpaid workers can be difficult to manage, and some companies could be better off simply paying an employee.

Several upset about unpaid internships

The rise of illegal unpaid labor in the aftermath of the recession has raised red flags with the federal government. "Not So Equal Protection -- Reforming the Regulation of Student Internships," is a report issued by the Economic Policy Institute last April. The federal regulation needs to get stronger on unpaid internships. That was the point of the report. According to the institute, current regulations controlling unpaid internships must be reformed, not only for the protection of unpaid workers, however to maintain a healthy labor market and prevent any further decline in wages, which have been sliding for 40 years. In the report, the institute contends that the present lack of clear regulations exposes unpaid labor to workplace discrimination and encourages companies to replace paid positions with unpaid internships.

Unpaid labor regulations

Workers are required to get minimum wage and overtime by federal and state laws, even while the institute wants more regulation. Unpaid internships are okay sometimes. Businesses have to follow the Fair labor Standards Act though. Under the FLSA, an unpaid internship must primarily benefit the intern, who must be closely supervised and not replace a paid position. Businesses violating the law often must provide back pay, pay fines up to $1,100 per violation and damages that equal the amount of wages not paid. However the FLSA doesn't apply to smaller businesses -- companies with less than $500,000 in annual revenue -- the sector that does the majority of the hiring in the U.S. Any business that does interstate commerce isn’t included in the FLSA exemption. Anything as simple as making a phone call to another state or accepting credit cards can count as this.

Articles cited

Fortune

management.fortune.cnn.com/2011/03/25/unpaid-jobs-the-new-normal/

Inc.com

inc.com/news/articles/2010/04/what-unpaid-interns-could-cost-you.html

The Hoya

thehoya.com/news/interns-pick-experience-over-pay-1.2124349