Unpaid Interns May Have Legal Right To Compensation
A growing number of lawsuits are being filed against employers that hire unpaid ‘interns’ who are, in reality, treated as employees, according to the lawsuits.
On June 12, 2013, Judge William H. Pauley III ruled that interns working for Fox Searchlight on the production of Black Swan had been hired to do remedial tasks reminiscent of regular employees’ work and as such, withholding benefits and pay from these interns violated the FLSA. This ruling, the first such judgment to uphold such a strict interpretation of the Department of Labor’s guidelines, has since prompted a surge in lawsuits against companies accused of exploiting the internship exemption to avoid their legal obligations. Gawker, Atlantic records, Conde Nast and MSNBC are among the companies to have had suits filed against them under the FLSA.
The Department of Labor’s Wage and Hour Division Fact Sheet #71 provides information to “help determine whether interns must be paid the minimum wage and overtime under the Fair Labor Standards Act […]”. The Fact Sheet relates only to for-profit businesses. The six criteria used to determine the legitimacy of an unpaid internship position are listed as:
1. 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;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. 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;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
Crucially, the Fact Sheet continues to state that if all of these factors are not met, then an “employment relationship” exists, meaning the company must meet minimum wage requirements.
As it has long been common practice in multiple industries to hire “interns” without offering training, treating the positions instead as a form of employment, some companies flout Department of Labor rules with little fear of legal action. The recent developments, however, and the publicity around the Fox Searchlight lawsuit, have made taking legal action against employers a workable possibility for the first time. ClassAction.org is currently offering free case evaluations to those who believe they are working as unpaid interns in violation of the Fair Labor Standards Act. More information and a free evaluation are available at ClassAction.org.
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