Do internships at profit-making industries need to be paid?

Do internships at profit-making industries need to be paid? That question is currently being considered by the United States Court of Appeals for the Second Circuit.

The matter is on appeal from the decision of the Federal District Court for the Southern District of New York in Glatt v. Fox Searchlight Pictures, Inc., 293 F.R.D. 516, 532 (S.D.N.Y. 2013). [READ CASE HERE]

The lower court in Glattruled that the unpaid interns involved in the movie “The Black Swan” should have received at least minimum wage. It based its decision in part upon the six factor test set forth by the Department of Labor See U.S. Dep’t of Labor Fact Sheet #71 (April 2010) (“DOL Intern Fact Sheet”). As the Court stated,

 [T]he Fact Sheet notes that “[t]he Supreme Court has held that the term `suffer or permit to work’ cannot be interpreted so as to make a person whose work serves only his or her own interest an employee of another who provides aid or instruction.” It enumerates six criteria for determining whether an internship may be unpaid:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Id.

Internships provide students or potential workers training, mentoring, network opportunities and experience. These reasons, along with the increasing competitiveness in the job market, are why interns are willing to work so hard for little or no pay. However, there is a line between that and a company hiring interns to essentially become unsalaried workers.

The Second Circuit should be rendering its decision later this year. 

Comments/Questions: gdn@gdnlaw.com
© 2014 Nissenbaum Law Group, LLC