During the summer, a lot of employers bring in college students as unpaid interns. Do these temporary unpaid interns qualify as employees and do they need to be paid? As any good lawyer will tell you: “It depends.”
The U.S. Department of Labor has announced it is stepping up the regulation of unpaid internships for students this summer. Many lawyers are dubbing this the “Fair Wage Summer of 2013” due to the high volume of lawsuits being filed against employers.
On June 11, 2013, a federal judge ruled that Fox Searchlight Pictures violated federal and state labor laws when it didn’t pay its production interns on the set of Black Swan. Fox Searchlight joins a long list of interns suing their employers for unpaid work including Hearst Corporation, designer Norma Kamali, Elite Model Management, and the Charlie Rose Show.
The DOL’s message to employers? If you are a for-profit enterprise and you’re not paying your interns, you’re probably violating the law.
Most organizations are unaware that interns are supposed to be considered employees under the Fair Labor Standards Act and are entitled to minimum wage and overtime, unless they fall into certain outlined criteria. Offering college credit in lieu of an hourly wage does not necessarily mean you’re in the clear of wage and hour restrictions.
If your intern is receiving training but no salary and the work you’re providing the intern serves his or her own interest, the DOL may not classify this person as an “employee” for purposes of federal minimum wage and overtime laws.
On the other hand, where the company is the primary beneficiary of the trainee’s labors, an employment relationship exists and federal minimum wage and overtime laws apply.
If you are considering bringing an unpaid intern into your workforce or have already done so, you may need to review your internship policies as the Department of Labor and State regulators are vowing to investigate and fine employers who have improperly misclassified interns. Contact Johnson Employment Law to go over your internship policies.