Employment & Labor

Unpaid Internships

US Supreme Court issues requirements for unpaid worker

The Minimum wage laws passed by the Department of Labor apply to protect workers in every state within the United States. Some employers, however, avoid compliance with minimum wage laws by improperly labeling employees as interns, students, trainees and aids.  There are specific requirements associated with classifying a worker as an intern, and those requirements all must be fulfilled in order for an employer to be allowed to hire someone for unpaid work. If you believe you were improperly classified as an intern and did not receive payments equal to at least minimum wage for work you performed, please contact us.

The U.S. Supreme Court has made certain requirements for employers to get out of paying an “intern” worker.
There are six requirements employers must meet to avoid paying an “intern”, “trainee”, “aid” or “student” worker.

The six requirements, according to the Department of Labor, are:

  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. “

See: U.S. Department of Labor Wage and Hour Division Fact Sheet, April 2010

If you have been working without pay but believe you should have been paid, please contact us.

The National Association of Colleges and Employers found that 55 percent of the class of 2012 had an internship or co-op during their time in college. Almost half of those — 47 percent — were unpaid. A third of internships at for-profit companies were unpaid. That is a lot of unpaid time. But the trend in the law is not to allow this anymore.

Judge William Pauley, who sits on the United States District Court for the Southern District of New York, ruled that Fox Searchlight’s use of interns in the production of the movies “Black Swan” and “500 Days of Summer” violated minimum wage and overtime laws, and that those interns can file a class action against the studio. He concluded:

They worked as paid employees work, providing an immediate advantage to their employer and performing low-level tasks not requiring specialized training. The benefits they may have received — such as knowledge of how a production or accounting office functions or references for future jobs — are the results of simply having worked as any other employee works, not of internships designed to be uniquely educational to the interns and of little utility to the employer. They received nothing approximating the education they would receive in an academic setting or vocational school.

A court looks to several factors when deciding whether an internship provides valuable training and whether it benefits the firm or the intern more. Department of Labor’s Wage and Hour Division, which enforces these laws, has a “fact sheet” which sets up six criteria for deciding if an internship is legal or not:

  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.

So in the Fox Searchlight case, the judge determined the internships in the case satisfied all six requirements.
There is another case, Xuedan Wang v. The Hearst Corporation, which discusses unpaid interns. In Xuedan, the plaintiff was a former unpaid intern at Harper’s Bazaar. But the judge in that case did not allow the class action, stating that one must look at the “totality of circumstances.” The class action wasn’t allowed because the plaintiff couldn’t show that all of Hearst’s interns faced similar enough conditions for them to file a suit together.

One expert stated, “I think the reasoning [of Fox Searchlight] will stand up strongly and clearly.” This expert believes that for-profit companies’ interns are employees entitled to back pay, and that they constitute a class that can file a class action suit. One expert even goes so far as to argue that even non-profit firms — which are allowed to have unpaid “volunteers” — are likely in violation of the law if they have actual unpaid interns. “Just because you’re working for somebody who’s been classified as a 501(c)3 doesn’t mean you don’t have to treat them like workers,” he says, though he concedes, “Interns would have the burden of proving they’re not volunteers. Somebody is going to have to step up and make the case.”

Update: The first version of this article said 52
percent of the class of 2012 had internships or

Interns or Trainees Can Get Help and Be Paid in Class Actions
A New Intern Employment Case in New York Has Been Certified as a Class Action.

Please contact us to learn more and read below for more information.

If you have been working without pay but believe you should have been paid, please contact us.

The federal Department of Labor sets minimum wage laws applicable nationwide. Every employer must abide by minimum wage laws, but some get around the rules by improperly classifying their workers as interns or aids.  An employer may have an unpaid intern only if the internship meets certain qualifying criteria. If you were classified as an intern and did not receive payment for work, you may be entitled to back pay and damages.

The U.S. Supreme Court has made certain requirements for employers to get out of paying an “intern” worker.
There are six requirements employers must meet to avoid paying an “intern”, “trainee”, “aid” or “student” worker.

The six requirements, according to the Department of Labor, are:

  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. “1

So, if a person has worked but not been paid, the employer must meet the above requirements. If they do not, then they should meet the Fair Labor Standards Act and typically must be pay workers at least the minimum wage and if the worker works more than forty hours in a workweek, then overtime pay should be paid.

The most common types of internships involve a classroom or academic setting compared to the employer’s actual operations. Such academic settings usually involve a college or university and academic credit may be awarded for the work.

Interns should usually not be participating in routine or recurring activities but rather acquiring skills that could be used in a wide variety of employment settings.

If an employer is using interns instead of regular employees to perform job functions, that is usually in indicator that the worker is not really meeting the requirements of the U.S. Supreme Court case.

Similarly, if the worker is heavily supervised like a regular employee, they are less likely an “intern.”

Trainee positions or “intern” positions should not be used as a “trial” period before regular paid employment. They should also not be a condition of employment.

If you have experienced unpaid “intern” or “trainee” work positions but believe they should have been paid according to minimum wage requirements, please contact us.

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