We’ve warned before about the potential issues raised when you utilize unpaid interns. Employers used to be able to take a level of comfort from internships run through educational institutes but, no more.
The Charlie Rose show recently settled a class action law suit brought by unpaid interns for up to $250,000.00. The lead plaintiff claimed that the tasks she performed such as conducting background research on guests, compiling press packets, and cleaning the show’s green room, were “real work,” not part of the sort of training program that should comprise an internship. Given that interns are not supposed to perform productive work, or displace regular employees, this likely led the show to settle.
Employers are not supposed to derive any benefit from having interns who are not paid at least minimum wage. Rather, in theory and under the Department of Labor regulations unpaid interns are supposed to disrupt the business providing the internship and to take supervisors away from their work to train and oversee the unskilled interns. To be exempt from paying minimum wage and overtime pay to interns, a business needs to ensure that its internship program is akin to a job-training program that provides general business skill that the intern can apply anywhere—not specific training applicable only to that business (or no real training at all). Thus, according to the DOL, having an internship program is something that businesses should be doing to contribute to the greater good of corporate America and its future workforce—not to obtain free labor.
It is no wonder that plaintiffs’ lawyers have gotten on the unpaid intern band wagon. A New York law firm has filed another class action lawsuit in February 2013, this time against the Elite Model Management Corporation. The Complaint asserts that the agency misclassified employees as interns specifically to avoid paying them minimum wage.
Employers need to take care with their internship programs—even when partnering with educational institutions that provide the interns with college credit. If you determine to institute an internship program, make sure that it looks like one—have the interns shadow different employees to get an idea of what they do on the job; schedule meetings where different employees talk to the interns in a group about how they got into that business; take the interns on field trips; have the interns rotate each week into a different department where they are closely supervised by an employee who just might get upset at having the intern underfoot. Don’t merely structure your internship program as a stepping-stone into a job.
While internships may have given many people in the past an inside look into the industry of their dreams, the Department of Labor wants to ensure that if someone is actually working, they are getting paid for their labors.