Unpaid Internships – Turning up the heat

The summer of 2013 is likely to be remembered as the year the unpaid interns pushed back. For years, eager students and recent graduates have taken unpaid positions. However, with companies’ bottom lines tightening, workloads burgeoning and more experienced workers looking for a way to open doors, the line between unpaid intern and entry level employee have begun to blur. This summer, some of those interns have fought back — and won. In June, interns who worked on the movie Black Swan won a verdict against Fox Starlight Pictures that has sent shockwaves around the business community. Cases have also recently been filed by interns against Conde Nast Publications and Sony Records, and two interns who lost their case before the Court of Appeals have asked the Supreme Court to rule on when an intern has a legal right to minimum wage.

The fact is that, regardless of whether they are called employees or interns, workers are entitled to minimum wage and overtime unless they can properly be classified as “trainees” or “non-employees.” And contrary to popular opinion, the fact that an intern is receiving credit for their internship doesn’t automatically exempt them from wage and hour requirements. Companies that improperly fail to pay interns face damages under state and federal law.

We have been talking about the risk of unpaid interns for years, but the cases this summer have turned up the heat. As you begin putting together 2014 budgets, take a closer look at what – if anything – interns are set to be paid to confirm that your company is in compliance.

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