When Does an Unpaid Internship Violate the Fair Labor Standards Act?

Since the economic crisis of 2008 and subsequent recession, we’ve seen a significant increase in the number of lawsuits filed by unpaid interns, alleging labor violations. As this Forbes article details, it isn’t necessarily that the amount of unpaid internships has increased – these have been with us since the early 1990s. Rather, the Great Recession has significantly decreased the likelihood of obtaining a full-time position from an unpaid internship. (“As for unpaid internships, students who have them are today hardly more likely to get a job offer [37 percent] than those who have no internship at all [35 percent].”) Additionally, graduates unable to find work are now being pulled into the mix, working for free and not even earning academic credit for that work.

Let’s take a step back – what is the legal status of an unpaid internship, particularly when it isn’t being done for credit? After all, this is a country with fairly stringent labor protections. It doesn’t seem like “free work” would be legal. And technically, it isn’t. An unpaid internship complies with applicable regulations when it is primarily an educational experience. So, no making coffee, no photocopies, no running of errands for the boss – nothing that would ordinarily be the province and responsibility of a paid employee. Any benefit that accrues to the employer should be wholly incidental in nature, an organic byproduct of the educational duties of the intern. In fact, the Department of Labor guidelines specifically state that an unpaid internship should occasionally be detrimental to the employer, who after all must provide some sort of education to his or her intern.

This shouldn’t be surprising – internships receive a specific “carve-out” in the law precisely because they would otherwise be illegal under the Fair Labor Standards Act. The FLSA, remember, mandates a minimum wage be paid for work of any sort, and most states have their own minimum wage amounts. No pay at all, clearly, would violate these laws.

Unfortunately, the rise of unpaid internship-derived lawsuits may be an indicator that employers are not following the statutory guidelines. This is bad news for everyone, not just the interns who perform menial tasks for free. More unpaid interns doing the work that should be done by paid employees means less paid employees being hired at all. The Huffington Post has even asked whether unpaid internships for graduates – trained workers holding degrees – is “the new normal.”

The lawsuits are arising in a variety of contexts, but the most high profile have been in the entertainment industry, which has traditionally relied on unpaid interns as one of the pillars of the industry. In 2013, interns on the film Black Swan won their lawsuit against Fox Searchlight Pictures after alleging that they were made to answer phones, assemble office furniture, and take out the office trash.

There is a place for unpaid interns in the workforce, particularly when they are receiving educational credit. And no doubt, many internships do offer a large amount of vocational training and on-the-job education. But unfortunately, too many employers are taking advantage of both the current job market and the desire of young students and grads to pad their resumes. If you suspect your unpaid internship runs afoul of the law, contact Serrins Fisher and speak to a trained employment attorney to find out more.

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