There’s no such thing as a free intern

A free intern 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, answering 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 working at Warner Music Group’s Warner Brothers Records unit.  Then, a New York federal judge ruled that another entertainment employer, Fox Searchlight Pictures, Inc., had 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 had violated the federal Fair Labor Standards Act when it failed to pay him and about 3,000 other interns for their work.  The federal judge on this case agreed to send class notices to former interns who worked at the company during a certain time period.

 

Under FLSA, if you run a for-profit business, you have to pay your interns at least minimum wage 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 another case, 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 if you’re a New York City employer, you’re not off the hook for harassment or discrimination claims by interns. The New York City Human Rights Law prohibits harassment and discrimination against unpaid interns as well as employees.

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. 

 

 

If you’re an employer and you need help updating your policies, schedule a Strategy Session with us today.

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