The economic downturn of recent years has led to an increase in the number of unpaid internships being offered. Employers are certainly happy to have additional unpaid help, and students and other job-seekers find these positions desirable in order to add additional experience to their resumes. While at first glance unpaid internships may seem like a win-win for everyone involved, several recent cases have highlighted how employers can take advantage of interns in an attempt to obtain free labor. Employers are subject to both federal and state wage and hour laws, and noncompliance with these regulations can result in significant sanctions. As discussed in an earlier post in this blog, federal law sets out a number of factors that are used to determine whether an internship is in compliance with federal labor laws.
Recent Gawker Media Lawsuit
According to a report published by Bloomerg.com, Gawker Media has joined the ranks of several high-profile companies that have been sued by interns for alleged violations of federal labor law. The plaintiffs are three unpaid interns that claim that they spent 15 hours a week working on blogs that “generate[d] significant amounts of revenue for Gawker.” The lawsuit comes on the heels of a decision against Fox Searchlight Pictures Inc. alleging similar violations. The plaintiffs allege that they wrote, researched, edited, and promoted content on social media, and seek unpaid wages and overtime in return for their hard work.
According to guidance issued by the United States Department of Labor, the more an internship program resembles an educational or academic program, the more likely it is to be classified as an extension of the intern’s educational experience. The guidance goes on to explain that if the interns are engaged in “productive work,” such as filing or assisting customers, they will not be excluded from the Fair Labor Standards Act (FLSA) because the employer is actually benefiting from the interns’ work.
The six factors that employers must follow when hiring unpaid interns stem from the 1947 Supreme Court decision in Walling v. Portland Terminal Co. After that decision, the Department of Labor issued guidelines for employers who wish to employ unpaid interns. The guidelines require that the training is similar to that which would be received in an educational environment, the experience is for the benefit of the intern, the intern does not replace regular employees, that the employer does not receive any immediate advantage from the intern, the intern does not automatically get a job at the conclusion of the internship, and that the employer and intern both understand that the intern is not entitled to any wages from the internship.
If you have worked as an intern and believe that you may have been entitled to wages, you should contact an experienced employment law attorney as soon as possible for a consultation.