Unpaid internships are sometimes very helpful for young
people to gain training and experience in a particular industry. In exchange for work, unpaid interns gain the
opportunity to improve their resumes and be a more desirable job candidate in
that field. Companies, however, may
sometimes take advantage of free labor without providing educational benefits
in return. This problem has become the
focus of numerous lawsuits and has consistently made headlines over the past
year.
Intern or
Employee?
The Fair Labor Standards Act (FLSA) requires that
anyone classified as an “employee” must be paid a minimum hourly wage and
overtime. Unpaid interns do not fall
under the “employee” label, and thus FLSA requirements do not apply to
them. However, companies may not simply
call someone an unpaid intern and expect to gain free labor. In fact, the United States Department of Labor (DOL) sets out six main
criteria for defining unpaid interns:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
If these criteria are not met in an internship program, the
company should be paying its interns.
Glatt v. Fox
Searchlight Pictures, Inc.
The entertainment industry is particularly notorious for
using unpaid interns to complete mundane tasks that would otherwise be
completed by paid employees. Recently,
this potentially unlawful trend has come to light in many lawsuits, led by Glatt v. Fox Searchlight Pictures, Inc.,
otherwise known as the “Black Swan” lawsuit.
A group of unpaid interns for Fox who worked on the Academy
Award-winning movie, Black Swan, claimed in the lawsuit that their tasks
primarily consisted of running errands, fetching coffee, and other mundane
tasks. The interns stated they received
no specialized training or other educational benefits and, therefore, should
have received minimum wage for their work under FLSA.
A lower court decided that the Black Swan interns did not
meet the DOL criteria for unpaid internships and should have been classified as
employees. The case is now under review
by a Court of Appeals, and the decision could set the stage for many other
unpaid intern lawsuits against companies such as Hearst Magazines, Major League
Baseball, Atlantic Records, Conde Nast, and the Charlie Rose Show. In the meantime, companies should take a look
at their internship programs to see if they meet the DOL criteria. If not, those interns deserved to be paid a
minimum wage.
If you have any questions regarding unpaid internships or
any other wage and hour concerns, do not hesitate to contact the Pershing
Square Law Firm today for help.
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