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Channel: The Law Offices of Mathew B. Rabin, a Professional Law Corporation » Technology
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Is it Legal to Use Unpaid Interns?

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The issue of whether or not a company can utilize the services of an intern without compensation seems to come to a head every few years. That time has come again, as has been reported on many different sites.  Recently three former interns of the site Gawker sued the company and its founder Nick Denton in Manhattan federal court, claiming Gawker violated the federal minimum-wage law.  In their complaint, filed on behalf of all unpaid interns of the blogging site, the three former interns claim they each spent more than fifteen hours each week writing, editing, researching and promoting Gawker’s blogs and that of its associated sites and were not paid for the work.  They claim that many other interns were also performing these tasks and receiving either little or no pay.

This suit follows another filed in Manhattan federal district court against Fox Searchlight by a group of unpaid interns who worked on the 2010 film “Black Swan”.  In that case the judge ruled against Fox Searchlight, holding that such unpaid internships must adhere to federal labor law in order to be exempt from minimum-wage requirements.

What are those federal law requirements?  The US Labor Department, in accordance with the Fair Labor Standards Act (FLSA), requires unpaid internships to meet certain criteria:

  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.

If all six of these criteria are met, then under the FSLA an employee-employer relationship does not exist, and therefore the FLSA’s minimum-wage requirements do not apply to the given intern.

Arguably the Fox Searchlight and Gawker internships would be difficult to properly classify as unpaid internships under the FLSA since according to the complaints each intern in essence was performing the work of the companies’ other similarly situated employees, but weren’t getting paid.

The FLSA has a number of other requirements and guidelines: for instance, the more a company’s internship program is structured around a classroom or other academic experience (versus the company’s actual operations), the more the internship will be viewed as “an extension of the individual’s educational experience”. Often this is where a college or university oversees the internship program and provides educational credit.  The more the internship provides the given intern with skills and experience that can be used in varied employment settings—as opposed to skills and experience specific to a company’s operations—the more likely the intern would be viewed as receiving training.

This is only a partial summary of the current state of internship litigation in the US, and is not intended to be and should not be construed as legal advice.  As with any legal requirement, be sure to read the entire law, act or statute itself, and engage counsel if necessary, in order to ensure your business is in compliance.  With unpaid internships, the specter of litigation against companies that engage unpaid interns is rising.  Be prepared!


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