Summer is almost here – the sun, vacations, Coronas, and lawsuits arising from unpaid internships. We’ve previously warned of these risks here and here. Yet, the suits that some call the “new slip and fall case” are more frequent than ever. It seems that every week brings news of another lawsuit filed by unpaid interns. So, another reminder is warranted. Employers must beware of these risks and take precaution to ensure that they are not the next victim of an FLSA class-action claim.
Recently, a New York federal judge granted class action certification to approximately 3000 former Warner Music interns in a wage-and-hour action. These internship suits assert claims under the Fair Labor Standards Act, which establishes minimum wage, overtime pay, record-keeping, and youth employment for private sector employees. Typically, a claim will arise when “interns” are required to work significant hours for free, and given tasks that would ordinarily be assigned to other employees for pay.
The US Department of Labor issued fact sheets for internship programs in order to assist employers comply with FLSA requirements. In these guides, the Department notes that internships in the “for-profit” private sector will most often be viewed as employment under the FLSA, unless six criteria for unpaid interns are met. Specifically, the internship must: (1) be similar to training in an educational environment; (2) be for the benefit of the intern; (3) not displace regular employees; (4) provide no immediate advantage to the employer; (5) not necessarily entitle the intern to a job at the conclusion of the internship; and (6) make clear to the interns that they will not be paid.
Employers whose internships programs do not meet each of these criteria must reevaluate their programs, or cease them entirely. Failure to pay interns for work that could be perceived as that of an employee could lead to costly exposure under the FLSA.