The Unpaid Intern - Am I Owed Overtime or Minimum Wage?

Job prospects are tough for young people these days, especially in some of the “glamour” industries like professional sports and the music industry- as a result employers in these and other industries are using these unpaid interns for free labor. In fact, several actors, musicians, and other large employers have had to settle cases with unpaid interns for violations of the FLSA. Investigators from the Department of Labor has said that these violations are widespread yet often times go unreported.

These cases sometimes involve ridiculous requests made by the employer of “interns” who they do not pay:

These unpaid internships are designed by law to be an honorable thing on the part of these companies to teach young people about a certain industry. However there is no honor in using unpaid interns to answer the phones or scrub the toilets.

If the internship is designed for the benefit of the employer, and not the education of the employee, those employers may be in violation of the Fair Labor Standards Act for failing to pay minimum wage and overtime. The Department of Labor has listed several factors to consider when determining if an employer can lawfully use unpaid interns without paying at least minimum wage and/or overtime. All 6 of these factors must be met:

• 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;
• The internship experience is for the benefit of the intern;
• The intern does not displace regular employees, but works under close supervision of existing staff;
• 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;
• The intern is not necessarily entitled to a job at the conclusion of the internship; and The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

All 6 of these factors must be met according to the Department of Labor. Also, courts have gone on to further clarify whether interns should be considered employees under the FLSA and therefore entitled to minimum wage and overtime. The Second circuit court of appeals recently stated that the above 6 factor test was not helpful when it came to “modern internships”; they came up with a separate test (courts look to the Department of Labor fact sheets for guidance, but are not required to follow them):

• The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee – and vice versa;
• The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions;
• The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit;
• The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.

Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199 (11th Cir. 2015)

The point of identifying these different tests (other courts have come up with their own balancing tests outside the two mentioned above)- is to show that each case must be looked at individually- there is no common rule which universally applies to every situation.

However the bottom line is if these employers are benefiting much more than the interns from an unpaid internship, there is a good chance they are in violation of the FLSA are committing “wage theft”- keeping money which legally belongs to these interns. Our offices has experience in representing unpaid interns in collecting all monies they may be owed. Please feel free to contact our office for a free consultation.