Summer is approaching and with it the annual flood of college students from campus to cubicle, working as interns for a few months that often pay nothing but experience.

Internships have become a rite of passage now for students, a prerequisite to finding a decent job in their field. They have become so prevalent that the U.S. Department of Labor recently undertook an initiative that more closely regulates them and applies the standards of the Fair Labor Standards Act (FLSA) that requires employers pay all workers, including interns.

But the Labor Department’s focus is only on unpaid internships at for-profit businesses and specifically excludes unpaid interns working at nonprofit organizations or public agencies. The Labor Department interprets the FLSA as providing an exemption for unpaid volunteers at those types of organizations, effectively classifying unpaid interns in those sectors as volunteers.

But a University of Iowa law student and legal researcher thinks this two-track approach isn’t fair to interns at those organizations who provide their labor for free while their friends in the for-profit world get paid for their work.

“When Congress enacted the FLSA in 1938, it did not foresee that internships would become commonplace—even required—for college students to advance in the job market,” says Anthony Tucci, a third year UI law student. “Congress can no longer ignore the importance of developing a public policy redressing the ills created by the unpaid intern economy.”

Tucci says those ills are many. They take work away from paid workers, suppress a worker’s future wages by requiring they work for a time with no pay, and train workers to ignore their workplace rights. They are also costly for the students, who often have to pay thousands of dollars in rent, living and travel expenses to spend a summer giving their labor away. That means students from low-income families may have difficulty in arranging for internships, putting them at a career disadvantage.

But Tucci acknowledges unpaid internships also provide benefits to the students and the organizations they work for. They let students provide community service, get work experience to put on their resume, and build networks to help them find paying jobs after graduation. Their labor also helps keep the organization’s doors open to do their vital community building work, especially during difficult economies.

“During the Great Recession, to compensate for budget shortfalls, nonprofits have been increasingly dependent upon volunteer labor,” Tucci says. He notes one recent study that estimates nonprofits saved $66 billion in wages by using volunteers, and could have saved an additional $38 million if they had better managed their volunteers.

So Tucci is reluctant to suggest a blanket expansion of the FLSA’s provisions to include nonprofit and public-sector organizations, too. To do so would close off professional development opportunities for students and threaten the survival of many organizations.

Instead, he suggests the Labor Department analyze the type of work an unpaid intern does to determine if the FLSA should apply, so that the nonprofit organization does not receive a benefit from the internship that exceeds the benefit to the intern. He suggests Congress revise the FLSA so that unpaid interns are exempt only if their work is associated with public service volunteerism, it comprises only a minority of the internship in a given workweek, and is motivated by civic or humanitarian purposes.

Interns whose work does not meet these standards will have to be paid as they would at a for-profit organization, Tucci says. Expanding enforcement will undoubtedly reduce bona fide unpaid internships at nonprofits, but he believes that’s a good thing because the internships that remain will focus on legitimate skill building. It also ensures that the student intern, not the organization, is the primary beneficiary of the relationship.

Tucci’s proposal is in his article, “Worthy Exemption?” published in the May 2012 issue of the Iowa Law Review. It’s available online at www.uiowa.edu/~ilr/issues/ILR_97-4_Tucci.pdf.