The end of the unpaid internship?

Unpaid internships: many of us done them. In fact, the unpaid internship seems increasingly to be a rite of passage in many industries (law included!).

But what happens when unpaid internships intersect with the national Fair Labor Standards Act, which governs minimum wage and overtime requirements?  The results may not be good for the business.

Just ask Fox Searchlight Pictures. A New York federal judge recently found that Fox Searchlight Pictures violated minimum wage and overtime laws by failing to pay two interns who worked on the 2010 movie “Black Swan.” According to the judge, Fox Searchlight Pictures should have paid the interns because they did the same non-industry related tasks as regular, paid employees, such as organizing filing cabinets, tracking purchase orders, making copies, drafting cover letters, and running errands.

In reaching his decision, the judge followed the United States Department of Labor’s six-part test for determining whether an internship can be unpaid. Under the test, the internship must be similar to training given in an educational environment, created for the benefit of the intern, and should not replace the work of regular employees. Further, the intern should work under close supervision of existing employees, and the employer should not receive any immediate benefit from the intern.

How many internships that you know can truly pass that test?

The district court’s ruling against Fox Searchlight is not necessarily the end of the unpaid internship, but It should clearly serve as a warning to businesses everywhere to run its unpaid internship program past its legal counsel. Companies with questions should feel free to call an employment lawyer at Briskin, Cross & Sanford for more information.

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