UNPAID INTERNSHIPS UNDER THE FAIR LABOR STANDARDS ACT: IS YOUR INTERNSHIP PROGRAM LEGAL?

Unpaid internships are common in many businesses throughout the country. Some interns enthusiastically accept unpaid opportunities to get exposure while others take unpaid internships because of a shortage of regular paid jobs. With the number of unpaid internship programs on the rise, interns need to know if they are entitled to be paid. This issue was given particular attention when unpaid interns working on the set of the film “Black Swan” filed a lawsuit for unpaid wages against Fox Searchlight Pictures. See Glatt v. Fox Searchlight Pictures, Inc.

In that decision, the court ruled that unpaid interns were “employees” covered by the federal FLSA and New York Labor Law, and therefore, should have been paid. The court stated that in order for a company to have an intern work without pay, the company must establish the following:

1. The internship needs to be similar to training that would be given in an educational environment;

2. The internship experience is for the benefit of the intern;

3. The intern is not there to do the work of a regular employee, but works under close supervision of existing staff;

4. The employer that provides the training gets no immediate advantage from having 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. See U.S. Department of Labor, Fact Sheet #71: Internship Programs under the Fair Labor Standards Act (April 2010).

Unless the above factors are met, the court will likely rule that an intern should be paid.

The Glatt case is under appeal with the federal Second Circuit of Appeals in New York.

We will continue to monitor the developments in this area of the law.

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