What do fashion designer Norma Kamali, journalist Charlie
Rose, Elite Model Management Corporation, and the Hearst Corporation have in
common? All have been sued by former unpaid interns, claiming that their
unpaid status violated the Fair Labor Standards Act.
With the summer internship season upon us, plaintiffs'
lawyers are gearing up to challenge unpaid internships (see www.internjustice.com).
Accordingly, we thought it appropriate to offer a refresher on the elements of
a compliant unpaid internship program.
In the for-profit arena, the Department of Labor and some
states have established guidance, to determine whether an internship may be
unpaid. The DOL looks at the following six criteria and, if even one is
not met, then the worker would be entitled to at least minimum wage under the
Fair Labor Standards Act, as well as time and-a-half for hours worked in excess
of forty hours per week.
According to a fact sheet
published by the DOL, the more an internship program is structured around a
classroom or academic experience as opposed to the employer's actual
operations, and the more the internship provides the individual with skills
that can be used in multiple employment settings, as opposed to skills
particular to one employer's operation, the more likely the intern would be
viewed as receiving training. Under these circumstances the intern does not
perform the routine work of the business on a regular and recurring basis, and
the business is not dependent upon the work of the intern. In this
circumstance, it is likely the DOL would find the workers to be properly
excluded from the FLSA's minimum wage and overtime requirements.
Conversely, if an employer uses interns as substitutes
for regular workers, or would have hired additional employees or required
existing staff to work more hours had the interns not performed the work, these
interns should be paid at least the minimum wage and overtime compensation for
hours worked over forty in a workweek.
Unpaid internships in the public sector and for
non-profit charitable organizations, where the intern volunteers without
expectation of compensation, are generally permissible.
Whether a particular position qualifies as an unpaid
internship under the law is a fact-specific inquiry, and errors in
classification can be very costly (see Charlie
Rose settlement). To avoid these errors, please contact your
employment counsel for help.
Visit Employment Matters
for additional insights from Martha J. Zackin of Mintz Levin's Boston office.
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