JUNE 14 — Once, an internship undertaken during your semester break would very likely land you a job. Now, that security is lost, as more and more students undertake not one, but a few internships — and preferably with “Big Companies” — before they actually graduate. The competition for internships is real, and it has almost become compulsory to undertake them. Many colleges and universities (especially business courses) even require internships (or “work placement”) during a “sandwich course”, and the assessment of their performances during the internships will have a direct or indirect effect on their overall academic grades.
Alan Milburn of the UK Labour Party, in a March 2012 report, highlighted that over 30 per cent of newly hired graduates had previously interned for their employers, and in some sectors almost 50 per cent. A UK organisation advocating for fair and paid internships, Intern Aware, had found that, in the past, graduates were employed for their potential and ability to learn; but now, they would have to prove from their curriculum vitae (or CV) that they have some internship experience with the company so that they can hit the ground running.
Therefore, if employment (especially in large corporations) now have implicit “new rule” of preferring candidates to have prior internship experiences, we have to ensure that the internship opportunities are competed as fairly as possible.
My contention is that unpaid internships are fundamentally unfair to students, and counter-productive to the corporations themselves.
The legal struggle
Recently in the UK, the House of Commons (equivalent to our “Dewan Rakyat”) voted 181 to 19 to take forward a Ten Minute Rule Bill to make it an offence for employers not to pay interns for their work, if the Bill passes through.
However, even without such a Bill, many interns can qualify for the minimum wage legislation as the broad interpretation of the word “workers” allows them to, as long as an intern works for a minimum number of hours, performs the set tasks, and adds value to the business, regardless of size and nature (excluding charities).
Likewise in Malaysia, we still do not have legislation that precisely find for unpaid internships to be unlawful, nor is there a similar Bill in the waiting.
However, inlike in the UK, Malaysian interns cannot circumvent the National Wages Consultative Council Act 2011, as section 2 of the Act requires an intern to be an “employee” according to the First Schedule of the Employment Act 1955. And internships would not meet such a narrow definition, as the closest that an intern can qualify for — which is “apprenticeship” — would require more than two years of contract with the employer.
In spite of that, it will not be a difficult task to introduce a Bill to amend this to include “interns” into the definition to qualify for the minimum wage — to make internships all “paid”. The more drastic alternative is to pass one specifically to find unpaid internships unlawful, like the UK House of Commons intends to.
Gus Baker of Intern Aware draws a commonsense approach to this, such that as long as you have a contract (written or oral) to work for the employer in exchange for the internship placement, and be personally providing services, it only makes logical sense that internships qualify to be paid, by legal definition. Any narrower definition to constrain this is unwise.
This is also because internships nowadays are becoming formalised, and the expectations on the interns have also increased greatly.
The class issue
It is not accurate to assume that the ones who undertake an internship even without pay are the most willing bunch. In fact, I would contend that the ones who would undertake an internship without pay are merely the ones who can afford to do so, instead of the most willing and most able.
The European Youth Forum had, in a survey, found that only 25 per cent of all interns were able to make ends meet with the compensation they were entitled to, and the vast majority (a staggering 65 per cent) still relies on the financial assistance from the bank of mum and dad to survive throughout that internship.
Most well-known corporations are located in the business centre of Kuala Lumpur, and it is unsurprising that the typical cost of living in a month, even with the most conservative estimate, would exceed RM800-1000. Since internships typically last for a few months (many corporations even make it a requirement that the internships last for a minimum of three months), that three months, if unpaid from the internship, would require each intern to spend money they do not have. Worse even if an intern does not reside around this region, as accommodation cost will be another headache.
It is unfair when we discriminate against a social and regional class for the opportunities they are equally, if not more, willing to undertake. The cycle of the elite based on wealth is perpetuated, when only the richest can afford to undertake the best internships, which would most likely land him or her a job, and thus resulting in higher future remuneration and business opportunities.
Young people are therefore caught in a “Catch-22 situation” (a “no-win” situation or a “double bind” situation) — the person will automatically be wrong regardless of their response — where they did not have enough experience to get a job but did not have the cash to work for free to gain the experience needed to make them more employable. If their mum and dad’s bank cannot make such a compromise, these young people will be effectively discriminated against, whether they are similarly or more qualified than others.
Businesses must acknowledge this fact. That “pay” that companies give during the internships are not necessarily for monetary gain (“they’re just greedy” or “youngsters expect too much”), but merely to be financially viable for that period.
We should not fault young individuals who have played by the rules accordingly throughout their academic life, and worked harder than others at school, and had taken thousands of ringgit of debt for a tertiary education, to only find that they are still eventually handicapped by these “new rules” they have little power of changing.
The business sense of paying interns
It is fallacious to claim that internships are designed entirely for the benefit of interns, and that businesses take little or nothing in return.
Internships are actually beneficial to companies as they can effectively train a person to the suitability of the company without paying them the full salary of an entry-level employee would be entitled to, and companies can easily hire the person once they finish graduation for the close relationships harnessed.
Paid internships are also more likely to acquire a more competitive and diverse pool of applicants for the companies. The companies therefore will have the luxury of selecting the ones who are most suitable for the company, enhance the internship experience for the interns, and subsequently gain prestige for the internship programme and the good impression towards the company.
If an internship is paid, the diversity of the candidate pools from all social classes, backgrounds, and regions are likely to enrich the collaborative and integrating experience from their internship work as diversity had always shown, from a wide range of statistical analysis, to be beneficial from the ability to think differently and progressively, instead of a unifiying state of mind from homogeneous candidates. Diversity had never threatened quality.
The other big problem
When an internship is informal and unpaid, it is more likely that it lacks structure (which many Malaysian internships still are) and becomes unhelpful to the interns’ overall experience. It will be incoherent, thereafter, if corporations claim that Malaysian graduates are ill-equipped with the necessary practical working skills, and that graduates did not make full use of the internships.
If internships are paid, it will logically divert more of the companies’ resources and attention towards making it a rigorous and enhancing one.
The New York Times reported in a research by the National Association of Colleges and Employer (NACE) 2013 from the US had found that 61 per cent of people who took a paid internship were offered a job at the end, compared with 38 per cent of those who had undertaken an unpaid internship. This statistic illustrates that when an internship is paid, the perception of employers towards interns will also be taken more seriously and interns are treated more as a possible future employee of the company, instead of an additional pair of hands of “free labour”.
Immorality
There is a psychological effect towards an unpaid intern of desperation and demoralisation. Unpaid internships that normally lack structure and scope to what the daily tasks are would have fall against a ruthless cycle of conceding and agreeing to do whatever they are asked to do, without protest. This might lead to further exploitation of the interns, and even further discrimination and potential harassment at work, as the unpaid intern had proved that they are indeed desperate to gain a foot early at the door, and they can be exploited and subjugated for that placement.
Moreover, the work that they have done during this internship is likely to be unappreciated by themselves and the employers. Not paying an intern sends a message that the work they have done is worth zero ringgit, and no matter how hard and however high the quality of the interns’ work is, it is monetarily worth nothing.
Interns will feel a decline in self-esteem when the “lesson” being taught in this early exposure to working life is that they are near to nugatory to the company. It paints a contrasting picture when the companies the interns work for are raking in millions of ringgit and the interns still remain unpaid.
The unintentional question by family and friends of “How are they paying you?” and “When are you getting paid?” further demoralises the interns and their career perspective.
The logic is a simple one, and businesses have to concede to this: if the interns are doing real work and there are recognisable benefits to the company, then the work deserves to be paid for.
What this leads us to
Young people will continue to take on unpaid internships because of the fear of losing out in the competitive market, for the sake of adding that column of the big-name company into their CV. Companies should stop hiding behind the shield of “forging business contacts/relationship is most important, not money” and “others will take it if you don’t”, as if the company is incapable of gaining any benefit from the internships. There should not be an implicit collusion by companies of offering unpaid internships with ignorance of the stated problems aforementioned and that this practice is inherently immoral.
So long as people are willing and able to do an unpaid internship, employers are likely going to exploit this ongoing practice. It is not going to stop itself, and we, therefore, need companies to make the needed changes quickly.
In Malaysia, I would guess this is a fresh issue that could score some political brownie points as it is not innately politically contentious (as our politics have not been particularly right or left wing in regard to government-businesses relationships) in this niche area.
Any politician want to take this up?
* James Chai is a first-year law student at Queen Mary University of London.
** This is the personal opinion of the writer and does not necessarily represent the views of The Malay Mail Online.
