In the current economy, many students and recent graduates who cannot find paid jobs have used unpaid internships as a way to improve their resumes and gain practical experience in a certain field. Over the past couple months, however, unpaid interns filed a wave of lawsuits alleging wage and hour violations against their respective companies. The lawsuits claim that the companies, most of which are in the media or entertainment industries, took advantage of free labor while providing little to no valuable education, experience, or benefits to the interns. Because of the lack of benefit received from the internship experience, the interns claim they are entitled to just compensation for the work they provided.
Requirements for Legal Unpaid Internships
The Fair Labor Standards Act has strict requirements that worker be paid a minimum wage and overtime for all work provided. Unpaid internships, by definition, do not comply with these laws. In recognizing both the potential value of unpaid internships and potential for abuse of interns, the United States Department of Labor set out a specific test to determine whether an internship is legal. The following six criteria must be met:
- 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.
Overall, an unpaid internship should primarily benefit the intern, not the employer, and should be focused on education and skill building. Merely assigning an unpaid intern routine work such as filing or running errands does not meet these criteria.
Recent Unpaid Intern Lawsuits
Eric Glatt served as an unpaid intern for Fox Searchlight during the production of the movie Black Swan. Glatt alleged that he was required to work long hours with little to no compensation and that his primary tasks were delivering paychecks, traveling back and forth from the movie set to obtain various signatures, and retrieving and filing personnel documents. A federal judge recently ruled that such an unpaid internship did not meet the FLSA exception criteria as it did not provide adequate educational benefits and required Glatt to perform mostly mundane tasks that would otherwise be performed by a paid employee. For these reasons, Glatt was incorrectly classified as an intern and should have been compensated for his work. At minimum, Fox will have to pay Glatt a minimum wage for the hours he worked on the production. The court also certified a class action lawsuit for all unpaid interns for Fox during that time period.
This “Black Swan” lawsuit was the first decision stating legitimate work without compensation cannot necessarily be classified as a legal unpaid internship. If the ruling is upheld on appeal, companies will likely begin reexamining how their unpaid internship program is designed and whether they are correctly classified. Other unpaid intern lawsuits are currently pending against Conde Nast, Atlantic Records, Hearts Corp., Gawker Media, and the Charlie Rose Show. Each of these cases will be examined and decided based on the nature of each individual internship offered by each particular company.