There’s No Such Thing as a Free Intern

On June 2, 2014 by Alix R. Rubin, Esq.

Free summer interns can prove costly if they become employee plaintiffs in a lawsuit or Department of Labor complaint.

Picture this:  Your college-aged daughter works in an office from 9:30 a.m. to 8 p.m., five days a week, answerInterning phones and making coffee and photocopies.  And she does this for no pay, no career training and no academic credit.

That’s how Kyle Grant allegedly spent nine months in 2012 and 2013, working at Warner Music Group’s Warner Brothers Records unit.  Then, last summer, a New York federal judge ruled that Fox Searchlight Pictures, Inc. violated federal and state laws by not paying its interns who worked on the movie set of “Black Swan.”

Grant rode that wave and sued WMG in New York federal court, claiming that WMG also violated the federal Fair Labor Standards Act when it failed to pay him and about 3,000 other interns for their work.  Last month, the federal judge on the case agreed to send class notices to former interns who worked at the company from June 2010 to the present.

Under FLSA, if you run a for-profit business, you have to pay your interns at least minimum wage (currently $8.25 per hour in New Jersey) plus time and a half for any hours worked over 40 in any workweek, unless your internship program meets all six of these DOL requirements:

  • The internship is similar to training in an educational environment.
  • The experience is primarily for the benefit of the intern.
  • The intern does not displace regular employees and works under close supervision.
  • You derive no immediate advantage from the intern’s activities, which may occasionally impede operations.
  • The intern is not necessarily entitled to a job at the conclusion of the internship.
  • You and the intern understand that the intern is not entitled to wages.

Like the WMG interns, the “Black Swan” interns performed such low-level tasks as taking lunch orders, making deliveries, organizing file cabinets and making photocopies — tasks typically performed by paid employees.  That’s a no-no.

In January, Elite Model Management Corp. agreed to pay $450,000 to settle a lawsuit filed by its former 100-plus interns, paying each intern between $700 and $1,750.  The rest of the money went to the attorneys.

If you don’t plan to pay your interns, you’ll go a long way toward avoiding such lawsuits if:

  • A school exercises oversight over the program and provides credit.
  • The intern does not regularly perform productive work or menial tasks.
  • The experience provides the intern with skills that can be used in multiple work settings.
  • The intern “shadows” regular employees.
  • The internship is of a fixed duration, established in advance, and not a “trial period” for employment.
  • You and the intern sign off on a “learning contract” that shows the six DOL criteria are met.

But you’re not off the hook for harassment or discrimination claims by interns.  A new law that extends to unpaid interns the anti-discrimination prohibitions of the New York City Human Rights Law just took effect.

So when your 26-year-old intern complains that a supervisor grabbed her butt and tried to kiss her, you’ll have to investigate and take remedial action, just as you would if the intern were a paid employee.  Better yet, be sure your employees understand that workplace policies apply to interns, too.  

One Response to “There’s No Such Thing as a Free Intern”

  • Excellent article, Alix. I learned more about a topic I was only aware of slightly via your well-written and engaging article..And I really like the new newsletter format and approach!