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When Is An “Intern” An Employee Under The FLSA?

Posted in Class Actions

Nowadays, an intern is a good thing to be.  The young person gets some experience for a resume and the “employer” gains some productive work accomplished as part of furthering the person’s education.  When the line is crossed and the issue becomes money, not getting “experience,” the putative employer must be able to defend its decision not to compensate these people when judged against a series of defined regulatory criteria that define what an intern is under the law.  A recent example of this is the suit filed by a former unpaid intern at The Hearst Corporation suing on behalf of herself and hundreds of other similarly situated people.  The case is entitled Wang v. Hearst Corporation and was filed in the U.S. District Court for the Southern District of New York.

The lead plaintiff had interned for Harper’s Bazaar.  She claimed that she worked on a full-time basis, i.e. fifty-five hours and claims she was never paid, notwithstanding that she performed job duties that regular employees should have been doing.  The Complaint labels this class of interns as a “crucial labor force” for Hearst, which publishes dozens of magazines, here and abroad.

The plaintiffs’ counsel asserted that “unpaid interns are becoming the modern-day equivalent of entry-level employees, except that employers are not paying them for the many hours they work.”  In this regard, the lead plaintiff, Ms. Wang, who was the head accessories intern, claims that she assisted at photo shoots and managed samples given to Hearst by fashion houses.

There are a number of criteria, under federal law, that are utilized when determining if so-called interns are actually statutory employees who must be paid at least the minimum wage (and overtime).  What they default down to, on a more global level, is that the internship is designed to enhance the education of the person without a substantial benefit inuring to the employer, in the form of productive work, which could and should be done by regular employees.  The Company is defending on this “educational” basis, asserting that it requires the interns to be enrolled in a university program and receive credit for their time spent at the company.

Be aware that Departments of Labor also focus on the presence of interns and scrutinize whether these people are employees or not.  There are other consequences for misclassification, beyond the minimum wage and overtime that would have to be paid back, such as unemployment and workers compensation issues.  Conducting an internal audit of any such intern positions, judged against the regulatory criteria, will provide necessary guidance.