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Scenario
“They think I signed some sort of slavery contract in the name of an internship. Heck, they don’t even
call this an internship. They call it probation,” said Aslam Ibn Bashir, a former business development
executive intern of Bifrost Organization. Aslam joined the organization as an unpaid intern during his
sophomore year at his university. Bifrost seemed a promising startup as one of the country’s fastest-
growing mental health organizations. Their internship opportunity was known as a ‘probation’ period,
after which an intern can directly join the core management team of the organization. However, Aslam
started noticing some functional discrepancies after working for a few months. The organization was
mostly an online platform without any physical office. According to Aslam, the managerial authorities
were inefficient in terms of work delegation. “The upper management told me to design a mobile app
layout and a website interface. But I joined as a business development executive, and not as an app
developer. I refused to design, and they started treating me harshly.” Aslam also mentioned that he was
promised that the probation period will last only 2 months. After that, he will get paid. But unfortunately,
Aslam worked there for 5 months and did not receive a single penny for his work. Despite the potential
of such an organization, Aslam had to leave.

Aslam’s friend, Arindam Acharya, is also working in the same organization and is currently a member
of the core management team. Arindam joined Bifrost with Aslam. When he was asked about his
experience in Bifrost, Arindam mentioned, “When I was selected for the internship opportunity, I was
told that I would get a comparatively low salary as this is a startup. I agreed and joined Bifrost due to
their immense potential. But I was muddled when I learned about the probation period. My experience
is the same as Aslam’s. I too worked 5 months for free.” Arindam had also raised a concern about the
term ‘probation’ which the organization was using instead of directly calling it internship. “Employees
are always under probation, aren’t they? Be it an intern or a core employee, the management team deeply
observes each of them. I still do not understand why they call it probation.” He also tried to reach out to
the management team regarding the issues of work delegation, to which they properly did not respond.
However, unlike Aslam, Arindam believes that they have just started their journey and yet to learn a lot.
So, he decided to stay in the organization and be a part of its journey ahead as a paid employee of
Bifrost.

They are not the only ones with this concern. "Which one do unpaid internships yield the most? Free
labor or work experience?" The debate remains and varies from workplace to workplace and even
country to country.

Perspective
Due to overpopulation, Bangladesh faces a myriad of human capital problems. Employment is a key one
among them. Job market in the country is extremely saturated, and there is a limited number of jobs
considering the high unemployment rate. Moreover, most jobs require a minimum number of years of
prior experience, often in the respective sectors. Thus, being concerned, most of the undergrad students
fall into the trap of these unpaid internship programs for this simple concern of experience gathering.
New or upcoming startups mainly offer these kinds of programs with the incentive of offering certificates
of completing internships. They post their seemingly impressive but apocryphal job descriptions in
Facebook and LinkedIn, and boost those for better reach. These posts intrigue the unemployed youth of
the society as one of the core value propositions is offering training to those who will be selected through
a rigorous selection process. After being recruited, the unpaid workers perform their responsibilities for
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20-30 hours per week and do not get paid for it at all - in the name of acquiring skills. Thanks to their
shady job descriptions, some organizations end up assigning uneventful and mundane tasks data entry,
email reply, cold call, content generation etc. to their finance, human resources, or marketing interns,
and get the tasks done for free. For instance, the usual rate of the content writing market is a set price of
50-70 paisa per word. If this can be done for free, even though unethically, why would any organization
waste their money on costlier options? One of the main problems for these unpaid internships is that
there will always be someone interested in working. The free market shelters these unpaid internship
offering organizations as there will always be someone who is interested in gathering skills and there are
people who are applying for these unpaid internships. This tendency is what some HR professionals
define as ‘unpaid internship culture’.

Drivers of Unpaid Internship Culture

From its very beginning, unpaid internship is a topic that bears a lot of criticism and scrutiny. Yet, it is
quite visible that fresh graduates or undergraduate students often tend to align themselves with the flow
and partake in this culture. It is time to look deeply into the matter to understand the main reasons behind
it.

The first thing about internships that one has to understand is that they have been around since the
inception of barter system and international trade. Becoming an apprentice to learn a skill or trade was
quite common in the 16th and 17th centuries. Many of the hired apprentices were not compensated with
money, as learning the trade was believed to be a bigger reward for later life.

After the industrial revolution, it also became a common sight in many office workplaces. It also benefits
the employer in so many ways that from big organizations to small entrepreneurs use this method.
Employers can recruit the millennials to do entry level work. If they had to hire employees for these
basic jobs, they would have to provide wages, insurance, and other benefits. The process of recruitment
itself is quite expensive. Whether the company itself does it or hires a recruiting agency, this is
undoubtedly a rigorous procedure. After the recruitment, they have to train the novel recruits, while still
paying them. Still, there is a high chance that the worker will quit at some point for a better opportunity.
On the other hand, interns do the same basic entry-level work for little to no payment. Companies can
observe them and if they see a good fit, can easily recruit them later. Internships make evaluation easier
and diminish recruitment cost to a great extent.

The world is currently in the midst of an epidemic. COVID-19 is paving the way to an economic collapse
comparable with the great depression of the nineteenth century. As the economy declines and firms have
empty wallets, they need to recruit unpaid interns. The production of graduates is enormous in our nation
and the need for office employees is declining as the nation is becoming 'digital', i.e. more efficient and
tech-dependent. Meanwhile, many unpaid interns already feel thankful for the offered chance, stay loyal
and work hard to acquire a place in the organization. As long as this mentality and gratefulness does not
alter, the culture of unpaid internship will not end anytime soon.

The general people of our nation do not have a strong stance regarding unpaid internships yet. There are
only a few laws that are barely able to protect the employees, and fewer people are aware of
them. Furthermore, as noted before, the bulk of the interns are loyal and appreciative for the offered
opportunity and will not raise any complaint even if there were legislation to assist them. They would
rather bear the burden for future reparations.
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Unpaid Internship Around the World

Developed countries

According to the US Fair Labor Standards Act (FLSA), if the primary beneficiary test proves that the
intern is the primary beneficiary of the employer-intern relationship, the internship becomes legal even
if it is unpaid. But it has been a long debate because the perception of the primary beneficiary to an
employer and an intern can be different. In the US, unpaid internships have always been criticized
heavily, and lately, there has been a fall in the percentage of unpaid internships from 50% to 43% in the
2012 to 2017 time period. A watchdog group, ProPublica Inc., reports that 35 lawsuits were filed
regarding unpaid internships since 2011 and it soon became a rising trend in the US to raise concerns
about unpaid internships.

In the UK, there is a slow decline in the percentage of unpaid internships as well and it fell to 56% from
70% since 2018. However, internship offers for the roles of marketing executives, activity teachers,
graphics designers, etc. are advertised online irrespective of legal restrictions. With the UK economy
being at its worst economic state which puts the graduates in the worst job market.

Similarly, in other developed countries in Europe and Australia, the legal aspects are quite strict
regarding unpaid internships but growing complexities in the job market and rising trend of generation
Z to achieve whatever is available in front even if does not add much value in retrospect. To sum up,
developed countries, especially the western countries have legal bindings that protect unfair free labor
exploitation but the vague line of distinction makes it hard to jump to a conclusion regarding unpaid
internships.

Developing countries

Most of the Asian countries are hubs for internships and of course unpaid internships as well. In China,
Hong Kong, Korea, and Japan, many renowned companies are also found exploiting students in the name
of internships. In most cases, they try to fill up the gap of entry-level responsibilities through hiring
interns, often unpaid. Due to the high population, growing unemployment, and huge competition, Asian
students or graduates are the easy baits of unpaid internship offers.

The grave concern is, most of Asian countries do not have any specific legal bindings to protect students
from unpaid internships. More so, the privileged can continue their unpaid internship programs or unpaid
probation periods to continue to their full-time job. But the underprivileged cannot afford to join these
unpaid programs hence they become deprived of the unwarranted comparison metrics of unpaid
internships. Adding to that, some of the entry-level jobs are designed in a way that applicants cannot
enter the full-time routine without going through the internship period. It is tough to tell when the
situation of Asian countries will change when the trend is overpowering while it is difficult to cater to
all the people with diverse scenarios with law.

Exploitation or value addition?

A company may seek an unpaid internship program for a variety of reasons. The program may be a
technique of recruiting and promoting the organization, a superb chance to network and another route
for gaining more workers while avoiding the fee that accompanies hiring new personnel. At the same
time, a company should remember that a credible unpaid internship program entails more than
contracting folks to complete work and without paying them.
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Throughout the past few years, fair and justifiable internship practices have been violated both locally
and globally. The lawsuit filed against Searchlight Pictures Inc. under Fox Media in 2011 is a prime
example of labor exploitation through legislative loopholes. The plaintiffs lodged complaints of labor
exploitation in the name of internship behind the production of acclaimed movies like ‘Black Swan’ and
‘(500) Days of Summer’. The trend is more apparent in the developing parts of the world. Especially in
Bangladesh, many dubious startups, most notably in the education and tech sector, such as GaoTek Inc,
Interactive Cares, JailBreak VPN, etc. have resorted to unfair internship recruitment policies. These
firms generally keep their organizational structure and activities ambiguous, and feed their employees a
similarly shady promise of ‘learning experience’ and ‘formal recognition’. These unfortunate ‘interns’
are given responsibilities above and beyond their contractual obligations as part-timers, and forced to
perform mundane and trivial tasks that essentially develop no realistic skill. The regrettable precedence
of an entire company based on the free labor of unpaid interns has also been set. Additionally, as
discussed before, most of the Asian countries including Bangladesh have no legal bindings regarding
unpaid internships. As a result, these malpractices are running rampant and exploiting valuable time and
energy off the undergrads and college students.

Applied Framework: Primary Beneficiary Test

The Primary Beneficiary Test is a flexible framework designed to determine whether a person is working
as an employee or intern within an organization. If the person is fulfilling all the duties of an employee,
he or she is required to be paid a minimum wage for their work. Therefore, courts use this test to consider
the ‘economic reality’ and whether the employer or the employee is the primary beneficiary. The test
consists of seven factors:
 The intern and the employer clearly understand that there is no expectation of compensation. Any
promise of compensation, expressed or implied, suggests that the intern is an employee.
 The internship provides training that would be similar to that which would be given in an
educational environment, including the clinical and other hands-on training provided by
educational institutions.
 The internship is tied to the intern's formal education program by integrated coursework or
academic credit.
 The internship accommodates the intern's academic commitments by corresponding to the
academic calendar.
 The duration is limited to the period in which the internship provides the intern with beneficial
learning.
 The intern's work complements, rather than displaces, the work of paid employees while
providing significant educational benefits to the intern.
 The intern and the employer understand that the intern isn't entitled to a paid job at the conclusion
of the internship.

These seven factors are not solely determinative, and are flexible from case to case. Depending on the
cases when all of them indicate that the intern is not the primary beneficiary of the process, the
organization is required to pay the intern as an employee.

The dilemma of self-sacrifice

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The practice of hiring unpaid interns is prevalent across different organizational types and different
industries. However, unpaid internships are the most beneficial to up-and-coming startups and
entrepreneurial firms, who are yet to possess the required capital to recruit, train, and manage properly
skilled full-time employees. These startups are fueled by a collective passion to achieve a dream, rather
than fiscal incentives. Therefore, albeit the zero to little monetary compensation, working in these
startups and aligning oneself to the aspiration and vision of the firm is often a fulfilling experience for
interns.

In a post-Fordist economic framework, the labor market frequently requires that workers compromise
security, time, and often pay in order to acquire experience and build skills that they hope to use to
materialize ideas of their future prosperous and autonomous selves. The notion of working for a startup
generally involves a degree of personal sacrifice. This aspect is especially true for interns working in
startups or small and medium enterprises, or SMEs. These organizations can compensate their interns in
more ways than just cash. Startups that have a vision of their future entices the youth, mostly
unemployed, who want to drive themselves in a similar way, while developing their CVs at the same
time.

This presents a critical trade-off for unpaid interns – whether they should invest their time and energy
into an idea that they believe in, or focus on some other activities that offer attractive financial
compensations and benefits. Another factor that comes into play is the long-term value as an employee
in the startups. Many startups promise unpaid interns permanent and paid jobs in the organization based
on their performance and sincerity during the internship period. Since these firms are strapped for cash,
they often offer equity ownership to their employees when they declare themselves as publicly traded
companies. Internship seekers may find themselves in a dilemma between putting their faith in the
potential of these startups, and joining a workplace that compensates for their time and effort in ready
cash.

Where do we draw the line?

While the global unemployment stands between 6.3-6.5% as of 2021, it is only fair to say every graduate
or student will try their best to make their place in the job market. Nonetheless, the debate regarding the
necessity or relevance of unpaid internships continue to exist.

On one hand, employers have the justification of finding the right fit for their roles from the huge pool
of applicants and training them at their own expenses hence the ‘unpaid’ part is already paid through
value addition to the interns.

On the other hand, if the interns end up performing entry level tasks for a long period, they are somewhat
ethically entitled to a fair wage. However, this discussion becomes blur in case of unpaid internships
because the perception of employers and interns vary from scenario to scenario. As we can see, Aslam
and Arindam from our case went for two different paths and acquired different values from their choices.
Questions remain, which one is more ethically appropriate? Did Arindam shelter the unfairness of unpaid
labor and gave scope to free exploitation? Or is it Aslam carried away by the Gen Z mentality of not
valuing the learning aspects as much as he should?

Indeed, there are some cases of unpaid internships in our country and abroad which proves clear
exploitation and scamming. But in scenarios where it is hard to evaluate, where do we draw the line
between labor exploitation and value addition through practical knowledge?