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In the News: 'Interns' vs. 'Employees'

December 29, 2014

By Lauren M. Hoye

Earlier this fall, a former intern of “The Late Show with David Letterman” made national news by filing a class action lawsuit against the Letterman show for unpaid wages. At the time of the filing, CBS commented publicly that the lawsuit was part of a recent trend toward challenging the legality of unpaid internships in the entertainment industry. Less than one week later, however, the intern dropped the lawsuit and issued a public apology to Letterman. 

While the Letterman lawsuit came and went quickly, it prompted a nationwide conversation about unpaid internships and under what circumstances they are legal. The answer is, it depends.

Whether a person is classified as an “intern” as opposed to an “employee” matters a great deal when it comes to pay, benefits and other workplace protections.

For example, the existence of an employment relationship means that the employer will be covered for purposes of workers’ compensation and unemployment compensation, anti-discrimination laws, and state labor laws, among other things.

Of course, when it comes to payment for services rendered at work, the federal Fair Labor Standards Act and state and local wage-and-hour laws require that employees be paid a certain wage for straight-time and overtime work performed. This is not, however, the case for interns. In Walling v. Portland Terminal Co., the U.S. Supreme Court held that that interns or trainees are not covered by the FLSA’s wage protections. Thus, one’s designation as an intern as opposed to an actual employee will carry a great significance at work.

The U.S. Department of Labor has attempted to clarify the “intern vs. employee” debate by publishing a fact sheet that sets six criteria for determining whether work constitutes an exempt internship for purposes of the FLSA. Those criteria are:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training that 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 of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

For more information, see the United States Department of Labor Wage & Hour Division, Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act, available here.  

The Department of Labor has stated that for the “intern” exemption above to apply, all of the six criteria must be met. Further, courts have indicated that they will apply these criteria in determining whether an individual qualifies as an intern and is therefore not entitled to the same benefits as an employee.

To summarize, the question of whether an individual is an intern or an employee is highly fact-specific. But guidance provided by the Department of Labor provides some parameters for making this determination. 

If you have any questions regarding your employment status and how it may affect your entitlement to pay and benefits, or if you have any other questions concerning fair pay at work, feel free to contact any of the Employment Law attorneys at Willig, Willig and Davidson.


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