Dodging the summer internship blues
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Lisa Napoli: Today's the day the minimum wage goes up for the first time in 10 years. The 70-cent increase boosts the hourly wage to $5.85 an hour.
Then there are the workers who don't get paid at all a€" many summer interns are happy to exchange their time for experience, even if it's for free. Those who do get paid a tiny something could pose problems for employers if they try to skirt the law, as Brett Brune reports.
MUSIC: "Summertime Blues"
Brett Brune: That's definitely not the theme song for one company selling cool drinks this hot summer: Honest Tea in Bethesda, Maryland, is jumpin' with activity. Sales are on pace to double this year. To handle the rush, they are beholden to the summer intern.
The company hired 20 college students to roam the country for 10 weeks. They're handing out samples of thirst-quenchers like Green Dragon Tea and Cranberry Lemonade. CEO Seth Goldman:
Seth Goldman: Part of what we're offering with the interns is a chance for consumers to connect a face to our brand.
This year, Goldman switched from paying interns a flat 300 bucks a week to an hourly wage. Now, they're averaging $350 a week.
Goldman's move is mindful of the Fair Labor Standards Act. That's the minimum-wage law that's been around for nearly 70 years. Labor lawyer Marc Zimmerman says more and more employers are becoming acutely aware of the law. He says that follows heightened interest by state and federal departments of labor. Companies that don't comply can face fines, penalties and lawsuits.
Marc Zimmerman: Employees know their rights. Generally speaking, if someone provides essential services for the benefit of the employer that others are paid to do, would normally be paid to do, or have in the past be paid to do, that's a flag that the person will be considered an employee.
Even so, interns are vulnerable. Employment law professor David Yamada says they're too scared to complain about pay a€" or lack thereof.
David Yamada: Students face the real risk of retaliation, and even blackballing, for filing a minimum wage complaint against an internship employer.
Yamada says unpaid internships are widespread, but that doesn't mean they're all legal. He says companies breaking the law should know they're risking legal action, and limiting opportunities for college kids who are less well off.
Yamada: Unpaid internships have a social-class impact, because many students cannot afford to work for free for an entire summer.
This has long-term consequences a€" studies show nearly half of all internships turn into full-time jobs.
In Los Angeles, I'm Brett Brune for Marketplace.