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Rules push on interns worries college chiefs

‘Chilling effects’ seen in reform

- The Washington Times - Sunday, May 30, 2010

A group of university presidents and lawmakers on Capitol Hill are expressing alarm over what they fear could be a coming crackdown by the Obama administration Labor Department on popular student internship programs.

The Labor Department insists it has no plans to change the long-standing regulations on internships, but many educators and college officials say they fear a new regulatory push by the federal government and by a number of states will lead employers to simply drop their internship programs, seen by generations of college students and recent graduates as a key steppingstone into the work force.

David Maxwell, president of Drake University, said 80 percent of the Iowa school's students participate in paid and unpaid internships, which he added "was one reason students chose to come here."

"We all agree there should be guidelines, and we haven't seen any signs of abuse, so there's a real sense of 'Where did this come from?'," Mr. Maxwell said in an interview.

Joanna Wiseley, director of career planning for Hillsdale College in Hillsdale, Mich., said she worried private employers would pull back for fear that the regulations or the enforcement standards are about to change.

"Yes, I am worried that it could shrink the market, and I am finding fewer internships," she said. "It's one more hoop to jump through."

The Labor Department's Wage and Hour Division in April put out a "fact sheet" for employers on standards for intern programs, noting that private, for-profit companies must pay interns the minimum wage and overtime benefits if the internships do not meet basic criteria on training, oversight and work tasks.

The criteria are not new, based on the 1938 Fair Labor Standards Act and subsequent court decisions. The guidelines are designed to block employers from simply substituting unpaid interns for paid workers or offering "internships" that have no training or educational value for the student.

Some critics of internship programs argue the abuses are more widespread than have been reported, because students trapped in worthless or exploitative internships are unlikely to complain, especially if they hope to work in the same field or industry after graduation.

But the release of the fact sheet - and fears that the old rules would be enforced with new zeal by the Obama administration - have set off alarm bells that a crackdown is in the works.

Nancy J. Leppink, deputy administrator of the Wage and Hour Division, told the New York Times last month, "If you're a for-profit employer or you want to pursue an internship with a for-profit employer, there aren't going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law."

Drake's Mr. Maxwell was one of 13 university presidents who signed a letter to Labor Secretary Hilda L. Solis, warning that the department's recent enforcement actions and public statements "could significantly erode employers' willingness to provide valuable and sought-after opportunities for American college students."

"We urge great caution in changing an approach to learning that is viewed as a huge success by educators, employers and students alike, and we respectfully request that the Department of Labor reconsider undertaking the regulation of internships," the letter concluded.

Among those signing the letter were the presidents of Northeastern University, Southern Methodist University, New York University and Claremont McKenna College.

Separately, Sen. John F. Kerry, Massachusetts Democrat, wrote Mrs. Solis on May 11 saying the federal government should balance the need to root out abuse and exploitation with the benefits that student internships provide.

"I hope you will consider any potential chilling effects on college internship programs before any regulatory steps are taken," Mr. Kerry wrote.

The Labor Department says it has heard the complaints, but that some of the fears expressed are overblown.

Mrs. Solis, in an April 1 Chicago speech unveiling the department's "We Can Help!" campaign targeting abuses of "low-wage and vulnerable" workers, said the campaign would particularly target industries such as construction, janitorial services and home health care - not the most popular industries for college internship offices.

The Economic Policy Institute, a Washington-based think tank with ties to the labor movement, was harshly critical of the university presidents' letter, saying it displayed "a nearly complete misunderstanding of the law the department enforces."

EPI Vice President Ross Eisenbrey, in his own letter to Mrs. Solis, wrote, "Many so-called internships are nothing more than summer employment under a fancy name. Students go to work packing boxes, running errands, answering phones, doing filing and performing many other tasks that are of immediate benefit to the employer but have no real educational value."

He added, "Ultimately, what the universities are asking is that the Department of Labor look the other way and condone violations of the law, when they ought to be working ... to ensure that their students are protected by regulations that are vigorously enforced."

c Michal Elseth contributed to this report.

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