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Unpaid Internships: How To Avoid Violating Labor Laws

Unpaid Internships: How To Avoid Violating Labor Laws

The weather is heating up, which means that summer is around the corner, and with it, the start of summer internships. Internships have long been a staple in the fashion industry, and are viewed by many as a rite of passage if one desires to have a real shot at making it in the business.

While these internships can be great learning experiences, the legality of them becomes murky when such internships are uncompensated. In fact, in recent years, there have been numerous lawsuits filed by unpaid fashion interns against fashion companies such as Condé Nast and The Hearst Corporation. The plaintiffs in these suits allege that their unpaid work constituted free labor, and thus was in violation of state and federal labor laws.

Most of these lawsuits have been settled or are still awaiting trial. One case, however, decided last summer, has shown the tide to be turning in favor of finding such internships as exploitative and illegal. In Glatt v. Fox Searchlight Pictures, Inc., a New York federal court applied a 6-factor test from the United States Department of Labor in determining that the plaintiffs had been incorrectly classified as interns instead of employees while working as production interns on the film “Black Swan.”

Thinking of hiring unpaid interns for your company this summer? Keep the Department of Labor’s 6-point test in mind while doing so:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If the internship does not meet the criteria set forth in the test, the “interns” are actually considered “employees” under labor law and are thus entitled to compensation. Companies should also be wary of the “academic credit” exception. In Glatt, the judge ruled that just because an intern receives academic credit has little bearing on whether the internship should be

Disclosure: This article is not legal advice. There is no attorney-client relationship formed by this article or any comments to this article.

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