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Interns
Proceed carefully when deciding to use unpaid interns. Many employers believe interns are unpaid workers. Unfortunately, this is not the case. Not all interns are unpaid and most interns are considered employees in the eyes of the law. Always consult with counsel or an experienced HR professional when using interns.
In 2010, the DLSE issued an opinion letter providing some clarification and guidance on when an intern is truly an intern. The DLSE previously applied a stringent, 11-factor test when evaluating an employer’s classification of a worker as an unpaid intern. This differed from the less stringent, six-factor test used by the federal Department of Labor (DOL). In its opinion letter, the DLSE decided to change course and apply the DOL’s six-factor test to evaluate a specific internship program. The six-factor test used by both the DOL and the DLSE is as follows:
"Intern" is a loosely used term, but for a worker to qualify for a non-paid internship, the above criteria must be used in analyzing the position.
Though the DLSE changed the factors it uses, it does not treat internships lightly. Use caution when using individuals who are seeking training or internship programs. If you have unpaid “interns” working for you, make sure you use specific criteria to define the work that the interns do and that you follow applicable legal requirements. Most “interns” will be considered employees under state and federal law, and you will need to comply with wage and hour laws, including paying them at least minimum wage. Closely follow the six part test used by the federal and state agencies.
A federal court ruled that two unpaid production interns on the set of the movie Black Swan actually “worked as paid employees” and that Fox Searchlight misclassified them as unpaid interns. The case serves as a strong caution for employers about using interns. Similar lawsuits have recently been filed by other unpaid interns in the entertainment industry. The lawsuit was filed, in part, by Eric Glatt and Alex Footman, who claimed that they were employees, not interns, and covered by both New York and federal wage and hour laws. The workers performed a variety of tasks, including: preparing coffee for the production office; ensuring that the coffee pot was full; taking and distributing lunch orders for the production staff; taking out the trash and cleaning the office; preparing documents for purchase orders and petty cash; traveling to the set to obtain signatures on needed documents; and creating spreadsheets to track missing documents in each production employee’s personnel file. In this case, the court ruled that the workers were not bona fide interns, but actually employees performing the same types of tasks that paid production assistants performed. Applying the six part test, the court found that:
The court ruled that the interns were improperly classified as unpaid interns and were, in fact, “employees” covered by federal and New York labor laws. The court also ruled that a class of unpaid interns working for Fox Entertainment Group could proceed with a class-action lawsuit.
In 2010, the DLSE issued an opinion letter providing some clarification and guidance on when an intern is truly an intern. The DLSE previously applied a stringent, 11-factor test when evaluating an employer’s classification of a worker as an unpaid intern. This differed from the less stringent, six-factor test used by the federal Department of Labor (DOL). In its opinion letter, the DLSE decided to change course and apply the DOL’s six-factor test to evaluate a specific internship program. The six-factor test used by both the DOL and the DLSE is as follows:
- The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school
- The training is for the benefit of the trainees or students
- The trainees or students do not displace regular employees, but work under close observation
- The employer derives no immediate advantage from the activities of trainees or students, and, on occasion, the employer’s operations may be actually impeded
- The trainees or students are not necessarily entitled to a job at the conclusion of the training period
- The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training
"Intern" is a loosely used term, but for a worker to qualify for a non-paid internship, the above criteria must be used in analyzing the position.
Though the DLSE changed the factors it uses, it does not treat internships lightly. Use caution when using individuals who are seeking training or internship programs. If you have unpaid “interns” working for you, make sure you use specific criteria to define the work that the interns do and that you follow applicable legal requirements. Most “interns” will be considered employees under state and federal law, and you will need to comply with wage and hour laws, including paying them at least minimum wage. Closely follow the six part test used by the federal and state agencies.
A federal court ruled that two unpaid production interns on the set of the movie Black Swan actually “worked as paid employees” and that Fox Searchlight misclassified them as unpaid interns. The case serves as a strong caution for employers about using interns. Similar lawsuits have recently been filed by other unpaid interns in the entertainment industry. The lawsuit was filed, in part, by Eric Glatt and Alex Footman, who claimed that they were employees, not interns, and covered by both New York and federal wage and hour laws. The workers performed a variety of tasks, including: preparing coffee for the production office; ensuring that the coffee pot was full; taking and distributing lunch orders for the production staff; taking out the trash and cleaning the office; preparing documents for purchase orders and petty cash; traveling to the set to obtain signatures on needed documents; and creating spreadsheets to track missing documents in each production employee’s personnel file. In this case, the court ruled that the workers were not bona fide interns, but actually employees performing the same types of tasks that paid production assistants performed. Applying the six part test, the court found that:
- The workers did not receive any formal training or education during the internship
- There was no internship experience structured to benefit them. Although the two production workers received some benefits, such as resume listings, job references and an understanding of how a production office works, these benefits were the same as any other employee would obtain and were not the result of an internship intentionally structured for their benefit
- The workers performed basic “routine” tasks that would have been performed by regular employees, such as filing, taking lunch orders, removing garbage and running errands
- Searchlight received an immediate advantage from the intern’s work. “Menial as it was, their work was essential,” the court said, and Searchlight would have had to pay others to do it
- The interns did not appear to be entitled to a job at the end of the internship
- Although the interns understood they would not be paid, the court noted that this factor was basically irrelevant since employees are not allowed to waive their entitlement to wages under the law
The court ruled that the interns were improperly classified as unpaid interns and were, in fact, “employees” covered by federal and New York labor laws. The court also ruled that a class of unpaid interns working for Fox Entertainment Group could proceed with a class-action lawsuit.