As a college student, you have sought an internship at one point or another. It may be a mandatory part of your curriculum, or you aim to gain real-world skills. It is often a debacle, as it poses a preeminent problem. What type of compensation do you obtain from an internship?
It would be the best experience if people provided everyone with monetary compensation. However, as we know, not all internships provide pay. However, some are, depending on the field and the specific company. That said, everyone seeks further detail regarding the compensation provided by an internship. Hence, this article gives you a step-by-step explanation of what to expect and answers the most asked questions.
The Importance of Internships
You may be doubting whether an internship is a sound idea. According to NACE Job Outlook, 91% of employers prefer all candidates to have work experience, even if it is general. However, 65% prefer candidates to have relevant experience in the field.
That provides you with the very first benefit of internships. It makes you more eligible for any position, or at the very least, it increases your chances of acceptance.
Moreover, it presents the opportunity for current students and recent graduates to obtain real-world experience in their chosen fields. This is one of the most valuable assets, as it allows you to apply the theoretical concepts you learned in college to real-life situations.
This gives you a deeper understanding of the field and allows you to evaluate your options regarding future career plans. An internship also allows you to develop transferable skills. Those often include communication abilities, critical thinking, problem-solving, and analysis. Employers often seek those attributes.
Well, but do interns get paid? The answer depends on whom you are addressing it. Regardless, an internship allows you to build your social and professional network. This is vital as you must connect with people, make contacts, and socialize with them for better options upon graduation.
Internships often allow you to collaborate with professionals within your field of choice. This means that you learn from the more experienced, but you also can forge deep and meaningful connections with them. It all depends on how well you perform, and how eager you are to learn.
Paid vs. Unpaid Internships: The Pros and Cons
Are internships paid or unpaid? Internships can be either, and the distinction between the two is based on whether the intern receives monetary compensation. Both have their advantages and disadvantages, which we will further elaborate on below.
A paid internship means you receive a salary or wage for your work. These are increasingly becoming more common, specifically in finance, engineering, and technology, where the cost of working and living is steep. Below are the top benefits of paid internships:
- Financial Stability: paid internships allow a student to receive a source of income, whether still in university or someone who has already graduated. This can be especially valuable for those who aim to support themselves, pre-graduation or after.
- Professional Experience: a paid internship allows you to gain real-life experience. Moreover, earning money as compensation will motivate you to work harder, as you have something to achieve.
- Potential Job Opportunity: a paid internship serves as a trial period for both the intern and the employer. It allows you to evaluate whether this workspace is one you want to work in, and if the employer evaluates your work ethic and skills, they might consider hiring you.
- Fair Compensation: it is no secret that everyone enjoys receiving money for their demanding work. That also applies to interns. You get paid for the time and effort you put into the job you are handling.
- Distinct Opportunities: some organizations that offer paid internships do not provide unpaid ones. You might be exposed to better opportunities and a more robust social and professional network in specific companies.
What is an unpaid internship? Unpaid internships do not provide any monetary compensation. However, you might receive academic credit, a stipend to cover expenses or other benefits. These are often common in non-profit organizations and specific fields such as arts and media.
However, according to the U.S. Department of Labor, specific criteria must be met when someone is given a position in an unpaid internship. In summary, they are as follows:
- The internship must be like training provided in an educational environment.
- The internship should be for the benefit of the intern.
- The intern does not displace any other employee but works closely under the supervision of the staff.
- The employer should refrain from taking advantage of the intern’s activities.
- The intern should not expect a position in the company upon completion of the internship.
- Both parties understand that the intern is not entitled to wages for the limited time spent in the organization.
- It should accommodate the intern’s academic calendar.
As for the advantages of unpaid internships, those include the following:
- Gaining Experience: getting your mind off the money allows you to gain experience within the workplace truly.
- Learn About the Industry: unpaid internships can provide individuals with an inside look at the industry, giving people a better idea of what to expect in the future.
- Chance to Learn: it allows you to learn new skills and gain the knowledge you might not receive under different circumstances.
- Academic Credit: many universities offer academic credit for unpaid internships, which allow you to complete your curriculum requirements faster. It is an educational experience, after all.
How Much Do Students Typically Earn as a Paid Intern?
There is no set amount an intern earns. It depends on various factors, including location, industry, companies, and experience level. That said, there isn’t a general analysis of how much an intern earns. However, a few institutes have compiled their data and provided us with some information.
According to the National Association of Colleges and Employers (NACE), the average hourly wage of paid interns in the US was $20.82 in 2021. This is the wage given to bachelor’s level interns and co-ops. Regardless, remember that the salary can vary depending on the industry. For instance, engineering majors often earn more than those in social sciences.
Another statistic from Zippia states that the average hourly wage for interns is $15.03. Here, the number can also greatly vary according to numerous factors. Logically speaking, bigger cities such as Seattle and New York should pay their interns more, as living standards and lifestyles are more expensive.
So, are most internships paid or unpaid? In 2021, CNBC stated that more than 40% of apprenticeships are still unpaid. However, that means that most internships provide a salary. It is also worth noting that various opportunities present you with a stipend or other forms of compensation in addition to the hourly wage. You might be given transportation, housing, or education reimbursement. Others might receive meal cards.
That said, an internship is your first opportunity to get a taste of the real world. So, can internships be unpaid? Yes, they can be. It often depends on whether the institute can offer you money in the first place and their general policy regarding internships.
Are Unpaid Internships Legal?
The following substantial question is: are unpaid internships legal? As mentioned earlier, they are permitted as long as they adhere to the U.S. Department of Labor criteria under the Fair Labor Standards Act (FLSA). These criteria include the internship providing a similar environment to your educational one.
Other criteria include the experience benefiting the intern, the intern does not displace other employers, the employer does not gain immediate advantage from it, and the intern does not feel entitled to earn a job position upon completion.
Another critical fact to note is that DOL does state that internships within for-profit private sector institutes are employment opportunities. Hence, interns must be paid at least the minimum wage and be eligible for overtime pay. However, this is disregarded if the criteria for unpaid internships are met.
It is essential to check the rules and regulations in the state you are doing your internship in. The laws differ slightly, and various other rules and criteria must be adhered to. International companies and working abroad will also have distinct regulations you must abide by.
Wrapping Things Up: Are Internships Paid or Unpaid?
The gist of the article is that there needs to be a specific answer to whether you will receive compensation during your internship. As we mentioned earlier, the decision will depend on the location, company, and industry. That said, both have their advantages. Without compensation, you might be more motivated to learn and gain knowledge. With balance, you might want to work harder.
However, it is legal to be an intern without receiving any wage. Specific criteria must be adhered to, but nothing prevents an institute from offering you an unpaid internship. Either one might provide you with additional benefits. Those include a stipend, compensation for transportation, free meals, or academic credit. Hence, evaluate your options wisely. We recommend that you pursue an internship that provides you with the most relevant experience within your field.