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Ruling Should Encourage Companies to Revise Their Unpaid Internship Programs

Image via Flickr by NASA Goddard Space Flight Center

Companies that hire unpaid interns may want to pay closer attention to how they set up their internship programs. A recent ruling by a New York judge suggests that unpaid interns who don’t receive the guidance and mentorship required by law can sue their employers for wages.

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This specific case was brought against Fox Searchlight Pictures. Interns who helped make the movie “Black Swan” convinced the judge that they were treated as employees rather than interns. They should, therefore, receive financial compensation for the work they did.

Courts have two options when measuring the legality of unpaid internships. One, the primary benefit test, compares what each party gets from the interns’ work. Another approach comes from 2010 guidelines established by the Department of Labor. Guidelines important for this case include:

  • the intern should not displace employees, but rather work under close supervision of a staff member
  • the internship should benefit the intern
  • the internship resembles training that one might receive in an educational environment

According to the unpaid interns who worked on “Black Swan,” they performed duties that regular employees should have done and they did not receive an educational experience that benefits their career development.

Fox Searchlight Pictures says it will appeal the ruling.

A similar case against the publishing company Hearst ruled against interns, so the New York judge’s decision does not create a clear path for unsatisfied interns to pursue wages.

Still, the scrutiny applied to these cases should encourage companies to pay closer attention to what they offer their unpaid interns. Businesses that see unpaid interns as free sources of labor should consider revising their programs. If interns don’t get something from their experience, then they could sue for back wages. When you add lawyer fees to those wages, those previously unpaid interns start to look pretty expensive.  [/show_to]

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