Do Unpaid Interns Deserve Compensation?

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In every profession, it seems like employers are looking for candidates with experience, although they are unwilling to provide the necessary experience to promising candidates entering the job market fresh out of school. This can be a daunting experience for many students, especially those eager to overcome the sharp learning curve that plagues recent graduates. For some, the answer lies in obtaining an unpaid internship. What employers neglect to tell their “free employees” is that an unpaid internship that requires many hours of work for no pay is illegal.

One intern who had enough filed suit against Condé Nast, claiming she was paid $1 per hour to work 12-hour days or longer. The class action suit alleged that the company maintained policies that violated federal law, the intern was underpaid, the company forced the intern to work over ten hour days, and the work that the intern performed was for the benefit of the company. Since the commencement of the suit, Condé Nast suspended its internship program. Last year, the company agreed to pay $5.8 million to settle this class-action lawsuit that included approximately 7,500 interns. More recently, Sirius XM agreed to settle a class-action lawsuit by paying litigants up to $1.3 million earlier this year. In the wake of these suits, other class actions were commenced, illustrating the prevalence of this growing trend. Other companies that allegedly violated federal labor law include Atlantic Records, Gawker, and the production company that owns Nickelodeon.

What Qualifies a Worker as an “Employee”?

According to the United States Department of Labor, there are six criteria to consider when determining whether a worker should be considered an “employee” under the Fair Labor Standards Act:

1. Training from the employer is similar to training that would be received in an educational institution;
2. The internship experience benefits the intern;
3. The intern does not displace a regular employee (rather, works under close supervision of existing staff);
4. The employer that provides the training does not immediately benefit from the intern;
5. The intern is not guaranteed employment following the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the experience.

What is the Bottom Line?

While the emergence of million-dollar settlements by mega corporations may sound promising, many of the lawsuits will settle for a few thousand per class action participant. The reason for this is because the simple tasks that many of these unpaid interns were performing could have been replaced by an employee making a minimum wage salary. To avoid future litigation, some companies may find that it is more cost-effective to cancel their internship program altogether, which will force future students to speculate whether it was worth complaining about in the first place.

If you think that you are a victim of a hiring policy that violates labor laws, you should seek legal assistance immediately to protect your rights. Contact a law firm to safeguard your legal rights and learn more about your case. The consultation is free.