Q&A with Jonathan Rector
Most internships warrant firms
pay at least minimum wage
Q: Tell us a little bit about the “Black Swan” intern case.
A: In 2011, two unpaid interns for Fox Searchlight Pictures Inc. brought a putative class action under the Fair Labor Standards Act (FLSA) and state labor laws alleging that their relationship with the company was that of employee-employer, and not trainee-trainer. The name of the case is Glatt, et al. v. Fox Searchlight Pictures, Inc., and it was filed in the U.S. District Court for the Southern District of New York. At issue in the case was whether the two interns, who worked on major motion pictures including “Black Swan” and “500 Days of Summer,” performed job duties that benefited the employer and were therefore entitled to at least minimum wage.
Q: How did the court rule?
A: The interns' duties largely consisted of obtaining documents for personnel files, picking up paychecks for co-workers, tracking and reconciling purchase orders and invoices and, of course, making copies. Importantly, Fox Searchlight admitted that if the interns were not performing these tasks for free, a paid employee would have been needed. Indeed, when one of the interns went from working five days a week to three days a week, the “Black Swan” crew “hired” another part-time intern to cover the remaining two days. Ultimately, the court ruled that the two unpaid interns were employees under the FLSA and state labor laws, and thus entitled to compensation.
Q: What factors must be met to be certain that the employment experience be considered an internship?
A: While the intern tasks described above may seem familiar, and in fact play out in offices throughout the United States, employers need to be aware of the expansive approach the FLSA takes to defining an employee for purposes of determining who is entitled to wages. As the court in Glatt noted, the FLSA defines the term “employ” broadly as including to “suffer or permit to work.” Under that definition, internships in the for-profit sector most often will be viewed as employment, unless the internship satisfies the “trainee” test.
To be certain that the employer is bringing on an intern, and not an employee entitled to wages, certain factors must be met. First, the internship, even though it includes actual operation of the facilities of the employer, must be similar to training which would be given in an educational environment. Second, the internship experience must be for the benefit of the intern. Third, the intern position must not displace an existing employee, but work under close supervision of existing staff. Fourth, the employer should derive no immediate advantage from the activities of the intern. In fact, on occasion the employer's operations may actually be impeded. Fifth, the intern is not necessarily entitled to a job at the conclusion of the internship program. Finally, there must be mutual understanding between the employer and the intern that the intern is not entitled to wages.
Q: What does this mean for employers?
A: Practically speaking, this means that gone are the days when an employer could bring on an unpaid intern for making copies, grabbing coffee or doing the office busywork that other employees are reluctant to do. Under Glatt, unpaid internships should be structured in such a way as to be an educational experience for the intern, rather than an exercise in what it is like to work in a particular industry. This could include having the intern work on hypothetical tasks related to the industry in which he or she is interested, a opposed to working on actual tasks that would benefit the employer. Unpaid internships often can be a valuable experience to participants and provide an opportunity for employers to get a feel for whether an individual would be an asset to the company. Employers should be aware that if the unpaid intern is performing tasks that ultimately are a benefit to the company, the intern likely is an “employee” and entitled to at least minimum wage.
PAULA BURKES, BUSINESS WRITER