Governor Cuomo Pushes Increased Minimum Wage

Minimum wage ImageNew York Governor Andrew Cuomo echoed President Obama this week by championing a raise for the lowest paid workers:  “We would raise the minimum wage to $10.50 statewide and in New York City… to $11.50.”  New York State’s minimum wage currently exceeds the Federal minimum wage at $8.75 per hour.   In his annual State of the State address, Cuomo address growing wage disparities: “We believe if you work full time, you should be able to pay the rent and pay for food and not live in poverty.”

Gov. Cuomo was not alone in this week in addressing minimum wage concerns. President Obama made his third consecutive plea with Congress to adjust the minimum wage for all workers, and encouraged Congress to try to live on $15,000 per year. “If not, vote to give millions of the hardest-working people in America a raise,” he said.  Obama has previously directed the Labor Department to revise overtime rules.

One of the largest groups of workers in the modern economy that do not receive proper minimum wage are interns — especially in media, fashion, and entertainment industries. For other employees and without realizing it, companies may pay employees less than minimum wage if asked to work during meal breaks, when they have to travel from job sites, and if they have their tips stolen while working in the restaurant or catering industry.

 

 

Viacom Settles Intern Class Action Lawsuit (Exclusive)

by Eriq Gardner at The Hollywood Reporter

Casey O’Jeda, the lead plaintiff, worked at MTV three years ago

Viacom is about to become the latest media giant to stage an exit from the messy litigation over unpaid internships. On New Year’s Eve, attorneys informed a New York federal judge that the company had come to a deal in principle to settle a class action lawsuit challenging whether its old intern program violated minimum wage and other labor laws.

Terms of the settlement haven’t yet been disclosed, but following the deals made in recent months for ex-interns at NBCU, Conde Nast and ICM, the tentative agreement signals another turning of the page on a tradition once seen as untouchable. The significance of the latest settlement goes beyond money: By reaching peace with Viacom, the plaintiffs have scored a mini cultural milestone. Viacom is owner of MTV, a bastion of youth culture.

Read more How All Those Intern Lawsuits Are Changing Hollywood

The lead plaintiff in the lawsuit against Viacom was Casey O’Jeda, who was an unpaid intern at MTV from September 2011 to January 2012, working on the network’s mobile website. Since the lawsuit was filed, more than 300 other individuals gave their consent to join the collective action against Viacom.

In April, U.S. District Judge Jesse Furman granted conditional class certification in this lawsuit and gave a green light to issue a notice to those covered by the litigation. The judge wrote that for certification purposes, attorney Lloyd Ambinder had offered sufficient generalized proof that plaintiffs were “victims of a common policy to replace paid workers with unpaid interns.”

Viacom could have challenged the ruling as Fox will be doing soon at the 2nd Circuit Court of Appeals. But Viacom has already made the corporate decision to pay all the interns at its various divisions.

Read more Former Intern Drops Lawsuit Against CBS, David Letterman’s Company

Although the parties now tell the judge there are a number of material terms that remain to be reconciled, the deal in principle has progressed far enough that the attorneys involved are asking for a magistrate judge to assist the parties in effectuating the settlement.

The overall monetary value of the deal will be revealed in a future court filing — the proposed settlement will need to be approved by the judge — but it will likely cover all interns who worked at Viacom after August, 2010 or three years prior to when the lawsuit was filed. The Hollywood Reporter will provide more information when it becomes available.

New York’s Coldest Summer, Especially for Employers Who Utilized Unpaid Interns

Employment Law Summer Recap 2014: Part 8 of 11 – New York’s Coldest Summer, Especially for Employers Who Utilized Unpaid Interns

Link to the Employment Matters Blog Article by Michael Arnold

It felt like we were in a dream. Or maybe San Diego. Day after day, 82 degrees and little humidity. In a word: pleasant. We know next summer probably won’t be the same, but we sure enjoyed this one. That’s right – this was the “coldest” summer in New York’s history. And the same can probably be said for many employers in the media, entertainment and retail industries who are battling unpaid interns in the courtroom.  Each week seemed to bring us another unpaid intern class action lawsuit: Oscar de la Renta, Coach, Donna Karen and Sirius XM to name a few. And courts continued to certify classes in existing unpaid intern lawsuits: Warner Music and Gawker for example. Many of these employers may be on the hook for millions of dollars in back wages, liquidated damages and attorneys’ fees.

This all started almost exactly three years ago when two former unpaid interns sued Fox Searchlight – an independent film division of 20th Century Fox – claiming that the company should have classified them and other interns as employees and paid them at least the minimum wage and overtime.  In June 2013 a New York Federal Court allowed the interns to seek collective relief and it was game on as lawsuit after lawsuit followed. The Fox Searchlight case and another intern case (Hearst) have since made their way up to the Second Circuit Court of Appeals, which will decide this Fall the appropriate standard a court should apply when deciding the classification issue.

Even if the Second Circuit ultimately makes it easier for unpaid interns to initiate class actions, we expect that the number of these lawsuits will eventually plateau and even drop off as many employers have already started to adjust their behavior by paying their interns or restructuring their internship programs to meet the Federal and various state department of labor internship tests.

In some cases employers have eliminated their internship programs altogether, but on the whole, we expect internships to remain prevalent in the workplace. In fact, one study says that more than half of graduating college seniors have held at least one type of internship while they are in their collegiate/formative beer pong years. Pro Publica, an investigative journalism non-profit, says that’s double the number from just a decade ago and it doesn’t even include college graduates, high schoolers or others individuals. Internships also play an important role in the lives of younger workers as they allow students and job seekers the opportunity to build their resume, grow their networks and gain valuable experience. They also serve as less expensive forms of labor for employers (even when paid). In other words, internships aren’t going anywhere.

Although summer is now behind us, that does not mean you should necessarily focus your attention away from this issue, especially if you have a winter break internship program or utilize interns year-round. We previously offered some helpful tips in structuring your program properly here.

Lionsgate Hit With Class-Action Lawsuit From Former ‘Wendy Williams Show’ Intern

Link to The Hollywood Reporter Article by Austin Siegemund-Broka

Anthony Tart’s case resembles others against ICM, Warner Music and more

Lionsgate is the latest to face a familiar Hollywood legal situation: a class-action lawsuit filed on behalf of its unpaid interns.

Anthony Tart, a former intern on The Wendy Williams Show, is claiming in a complaint filed on Friday in a New York district court that he and other interns are entitled to payment for their work on the talk show. He’s suing Lionsgate and affiliated Debmar-Mercury, a producer of Wendy Williams, to recover wages he claims he and similarly situated interns are owed under New York and federal labor laws.

His tasks on the show included washing dishes, getting coffee, picking up art supplies and throwing out garbage, he claims. He’s arguing, in the same fashion as other former interns litigating against their employers, that his work didn’t meet the Department of Labor’s standards for unpaid internships.

In particular, his complaint holds, the production companies benefited from the interns’ work but provided the interns no academic or vocational training, and it would have required hiring employees in the absence of the interns.

It’s the argument that former Fox Searchlight interns Alex Footman and Eric Glatt made successfully in their landmark win against the studio last year, a ruling that came with a class action certification over internships throughout Fox Entertainment Group. That decision — which is currently under appeal — led to the swath of internship lawsuits filed against studios and companies including ICM, Warner Music, Viacom and NBCUniversal.

Lionsgate, which produces films including The Hunger Games series and television like Mad Men and Orange Is the New Black, continued not paying its interns even after most studios introduced paid internship programs in the fallout of the Fox Searchlight decision, the Los Angeles Times reported. It’s providing pay for its upcoming spring internships, however.

Tart is not proposing a class to represent interns throughout Lionsgate. If certified, his class action would only cover former and current interns on The Wendy Williams Show. His complaint estimates there are about 100.

He is represented by Lloyd Ambinder at Virginia & Ambinder and Jeffrey Brown at Leeds Brown, who’ve represented numerous former interns pursuing similar litigation, including those suing Warner Music and Atlantic Records. More recently, they represented an intern in a lawsuit against David Letterman’s production company and CBS, which the intern withdrew one day after filing. She reportedly later told the New York Post that her “beguiling legion of lawsuit-hungry lawyers” had coerced her into the lawsuit.

A Lionsgate spokesman declined to comment on the current lawsuit.

PR industry’s exploitation of interns probed by HMRC

Link to PRWeek Article by Loulla-Mae Eleftheriou-Smith

PR professionals are among the worst offenders for exploiting interns, according to research by campaign group Intern Aware.

Ten per cent of the 100 firms reported to HM Revenue and Customs for investigation are either PR agencies or companies advertising PR roles.

HMRC is looking into whether employment law has been broken through the use of unpaid interns.

Intern Aware, which fights for fair, paid internships, last week submitted the list of 100 potential transgressors to junior employment minister Jo Swinson MP, who referred it to HMRC.

A spokesperson for HMRC said it always investigated information received concerning the breach of national minimum wage law.

Gus Baker, co-director of Intern Aware, refused to name the firms on the list, but confirmed that there are small- and mid-sized agencies. Food and fashion PR firms are prevalent among those named and shamed to Government.

Baker said: ‘We’re not saying these firms are definitely breaking the law, but these roles look like they are entitled to the minimum wage and the advertised jobs could be done by paid staff.’

The campaign group built its list by crowd-sourcing information from vacancies advertised on popular job sites including Internwise and w4mp, and said it was already building follow-up lists to submit for investigation.

The development casts a shadow on the comms industry’s treatment of interns,despite ongoing work by the CIPR, the PRCA, PRWeek and Intern Aware to combat the issue [see timeline, below].

The PRWeek/PRCA campaign to end the practice of unpaid internships launched in October 2011, with a list of member agencies committed to paying at least the national minimum wage. The number has risen by ten since the start of this year to 85 out of 311 members.Job ads for a number of comms agencies looking for full-time interns offering no pay aside from expenses have appeared online. These include Cubo PR, which is advertising for a three- to six-month internship.

Baker emphasised that Cubo is not on its list but said that ‘companies such as Cubo’ risk restricting their pool of potential employees to those who can afford to work for free.

Cubo had not responded as PRWeek went to press.

Interns timeline

April 2013 Eighty-five agencies are listed by PRCA as paying interns at least the national minimum wage.

June 2012  Arcadia makes retrospective payments to unpaid PR interns.

June 2012 PRCA and Intern Aware research finds that of 150 young PR professionals, 23 per cent were unpaid.

March 2012 The CIPR launches an ‘Internship and Work Placement’ toolkit.

Oct 2011 PRWeek and PRCA launch campaign to end unpaid internships backed by Deputy PM Nick Clegg.

Are Unpaid Fashion Interns The Oppressed Housewives Of Today?

Link to The Grindstone Article by The Jane Dough

If you think The Feminine Mystique isn’t still relevant today, then you have got another think coming. Atlantic writer Phoebe Maltz Bovy recently pointed out that unpaid internships, especially those in fashion, are often written off as a rich kid problem — specifically, a rich girl problem, as women take the majority of unpaid internships and usually have another source of income (most likely their parents.)

“To many people, the face of the unpaid intern is already that of a young woman whose survival (and possibly It-bag) needs are already being met, and there’s a reason for that,” she wrote. But she points out that the assumption that these young, (possibly) privileged women don’t need to be compensated because they are taken care of financially is the real problem, one which housewives used to face when they first tried to work outside the home.

Though they may have cool clothes and be in the same room as awesome designers, it ain’t so easy being a fashion intern. Last year more than 100 prominent fashion houses were being investigated by HMRC concerning the payment of their interns. Tanya de Grunwald, founder of the career website Graduate Fog and campaigner for paid internships, says this is not exactly breaking news, as fashion houses have been exploiting young workers for years.

“For too long, fashion houses have recruited brazenly for what are clearly illegal roles that take advantage of those who do them and exclude those who can’t afford to do them. These interns are not just work shadowing, making the tea and sorting the post. They are effectively doing full-time jobs, just without any pay. Most of the time they do not lead to paid, permanent jobs – only to another unpaid internship. Many fashion companies are known to have a revolving door system, where one unpaid intern is simply replaced with another at the end of their placement.”

The web site Fashionista did a piece on the horrors of being a fashion intern. Young women’s experiences included washing a urine-soaked dress for a fashion shoot for Vogue, scooping up dog poop, retyping to-do lists and returning yogurt to a store.

Independent Contractor v. Employee: Knowing the Difference

by LaDonna M. Lusher and Christina Isnardi

So you just landed a new gig and your employer told you that you’re working as an independent contractor and not an employee. While you might not think much about it at the time, the distinction between independent contractors and employees is significant. It dictates your ability to receive overtime pay and certain benefits, determines how your income is taxed, effects whether you can offer the same services to competing businesses, and how much supervision and control your employer has over your work, among other things.

Federal and state policies and statutes concerning the differences between independent contractors and employees are overly complex, which in part causes the misclassification of many employees as independent contractors. Generally, the following two tests are applied to properly determine the employment relationship.

“Right to Control” test

The “Right to Control” test focuses on the degree of control an employer exercises over a worker.

A worker is more likely to be an employee if the employer exhibits a high degree of control over the worker, such as directing when, where, and how the employee works. An employer also shows control by paying for the employee’s travel, equipment, and supplies.

A worker is more likely to be an independent contractor if the employer exhibits a low degree of control over the worker, who is considered to be “self-employed.” Although the employer has the right to direct the result of the work, the worker is free to work when, where, and how s/he chooses. An independent contractor also shows independence by typically paying for most or all business-related expenses.

“Economic Realities” test

The “Economic Realities” test focuses on the degree to which a worker is economically dependent on the employer’s business.

An employee typically has a high degree of economic dependence on the employer’s business. An employee is normally hired for a permanent position, and has a set schedule. The employee still works even if his services are needed irregularly or on a part-time basis.

An independent contractor typically has a low degree of economic dependence on the employer’s business. The independent contractor is hired by project, on a temporary basis and generally sets his/her own schedule. The independent contractor has a defined relationship that usually ends when the services for that project are completed, and s/he typically works on projects at several businesses simultaneously, including competing businesses.

Difference in Wages and Tax Status

Even if employees and independent contractors do similar work, the Internal Revenue Service holds these workers and their employers accountable to different tax responsibilities.

The wages of an employee are subject to payroll tax withholdings, social security, Medicare, and unemployment insurance. Employees are given a W-2 statement at the end of the year that shows the amount of withholdings. Employees are also usually given a benefits package from their employer, which may include health care, vacation and/or sick pay, and retirement benefits. Most hourly employees are entitled to be paid overtime compensation for hours they work beyond forty in any given week.

Independent contractors are subject to Self-Employment Tax and receive their pay without any withholdings taken. Independent Contractors are given a 1099 statement showing the income they received as a self-employed worker. Usually, Independent Contractors do not receive any benefits packages from the employer or overtime compensation.

The differences between an independent contractor and an employee amount to much more than a difference in name—and have an impact on the operations of a business and the livelihood of a worker. Some individuals prefer an independent contractor’s freedom to control their own schedule, while others value the benefits and stability of an employee-employer relationship. Either way, employers and workers alike should collaborate to ensure proper employment classification so that both parties can avoid any conflicts and mutually benefit from the relationship.

Common Cents: The Benefits of Paid Internships

by Lloyd Ambinder and LaDonna M. Lusher

Even before the onset of the 2008 recession, college students and recent grads have eagerly, if not desperately, sought out unpaid internships hoping to gain the necessary experience to land a paid job. Unfortunately, rather than provide a structured educational environment for interns, many, if not most employers treat interns like entry level employees without providing them any compensation. In the end, rather than acquiring critical experience helpful to starting their career, most often these unpaid interns end up doing menial work from cleaning the office refrigerator to running personal errands for their supervisors. All the while their colleges and universities continue to charge thousands of dollars in tuition for academic credit, while providing little or no oversight of the interns’ activities.

While it is not per se illegal for employers to provide unpaid internship programs, perhaps it is time to make such programs unlawful. Many unpaid internship programs do not come close to satisfying the U.S. Department of Labor’s six-factor compliance test that would render them legitimate. Complying with the DOL test is likely to prove burdensome and inefficient for most employers, particularly since a basic tenet prohibits interns from performing work that would benefit the employer or would serve to displace another compensated employee.

A common sense balance would be to compensate interns in a work environment that provides on-the-job training thereby benefitting the employer and the intern. Employers would be free to utilize interns as they see fit, and take advantage of their talents by having them perform substantive work instead of menial tasks. Employers could further assess the interns work performance and potential for full-time employment without being subject to oversight by the DOL.

Companies such as Viacom, Sony, Madison Square Garden, Donna Karan and Warner Music Group, all of whom are currently facing lawsuits brought by unpaid interns, could have avoided the expense of litigation and eliminated exposure to liability by simply paying their interns at least minimum wage (currently $7.25 per hour under federal law). Those employers, some of whom allegedly required their unpaid interns to perform such tasks as getting coffee, making copies, and picking up supervisors’ prescriptions, could have compensated their interns and directly benefitted from the work and skill set the interns offered.

The interns would also benefit from mandatory paid internships because they would receive an actual wage for any variety of tasks they are required to perform. Studies show that, while nearly half of all graduating college students have performed some kind of internship, those fortunate enough to land a paid internship are more likely to gain a full-time job offer or higher starting salary than those who complete an unpaid internship. And those who perform an unpaid internship do not fare any better in finding paid employment than individuals who do not participate in any internship program at all. Offering at least minimum wage to these highly motivated and educated individuals would provide further incentive for them to work even harder to gain full-time employment.

The economy also benefits from paid internships, which generate millions of dollars in taxes and revenue to state and federal governments by requiring employers to pay minimum wages, overtime, payroll taxes, unemployment insurance and workers’ compensation. Paid internships also increase the number of paid entry-level employment positions, resulting in a decrease in the unemployment rate. Interns who are compensated also face a lesser financial burden than those who are forced to accept an unpaid internship and simultaneously work a paid position, or borrow money, simply to make ends meet. Mandatory paid internships would also generate competition amongst businesses competing for talented new recruits, and result in higher salaries for entry-level employees.

Finally, requiring employers to pay interns a minimum wage promotes the underlying remedial purposes of the Fair Labor Standards Act which was enacted by Congress to protect workers from detrimental labor conditions and ensure payment for work performed. Conversely, encouraging employers to offer unpaid internships results in paid employees being replaced by unpaid interns, a reduction in the number of paid employment positions, and the elimination of fundamental workplace rights.

It Pays to Pay: 3 Reasons Why Employers Benefit from Paying Interns

by LaDonna M. Lusher and Christina Isnardi

Every year, thousands of aspiring young professionals find work through internship programs hoping to gain valuable experience and meet potential contacts for future employment. Many of these internships are unpaid and offered by employers seeking to benefit from the labor of bright and talented workers at little to no cost. These potential employers assume that offering unpaid internships will be a real money-saver, however, paying interns can save even more in the long-term. Here are three reasons why it pays to pay interns.

Avoid Expensive Litigation Costs

Employers who pay interns below minimum wage may expose their for-profit business to unpaid wage violations that could end in pricey lawsuits. In order for a for-profit employer to legally host an intern who is unpaid, the internship must meet all six criteria in this strict set of guidelines from the U.S. Department of Labor1:

  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 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.

Although these guidelines are subject to interpretation, two overall themes are quite clear: the internship must be for the benefit of the intern – not the employer, and the intern cannot take the place of paid employees.

Currently, over 40 unpaid internship lawsuits have been filed in the U.S., and the number continues to climb. Lawsuits brought under federal law include unpaid interns who worked for their employer within the last three years since the lawsuit was filed. In the state of New York, the statute of limitations extends back six years. Defending against an unpaid wage lawsuit can be time-consuming and costly—not only to a company’s finances, but also to its reputation. These risks make it more cost-effective to pay interns at least a minimum hourly wage than to defend against costly litigation that can take years to resolve.

Receive Short-Term Value: More Qualified, Valuable Workers

Putting the law aside, compensating interns comes with other benefits that add value to a company. With paid intern listings, firms will likely attract more qualified intern candidates. In fact, paid internship postings attract 2.5 times the number of applicants2, which allow employers greater selectivity in choosing the best candidate for the position. Studies have shown that simply paying a minimum hourly wage in fields like marketing, communications, and public relations can attract the top 25% of students, while paying $12 or more per hour can attract the top 5% of students.3 And finding the best candidate could really pay off—Nathan Parcells, co-founder of InternMatch, estimates that hiring the right intern could add $50,000 to your company.4

Receive Long-Term Value: Higher Worker Retention Rates

Along with receiving short term value from hiring the most qualified and capable interns, companies with paid internships have a significantly higher chance of retaining their interns as future employees. A study by the National Association of Colleges and Employers found that almost 40% of employers reported a higher five-year retention rate among employees they hired from their paid internship programs.5 Moreover, according to Management Review, employers save $15,000 in training, hiring, and turnover costs for each employee they hire from their intern pool.6

Paying minimum wage for a typical 10-week full-time intern costs employers around $3,000. This is a modest amount when compared to the potential costs of expensive litigation, and the value the company could receive by retaining more qualified workers. In any event, perhaps the most significant reason for companies to offer paid internships is that, if the interns are paid a wage, they can perform any work the employer needs, including work that benefits only their employer.

Work Cited

  1. http://www.dol.gov/whd/regs/compliance/whdfs71.htm
  2. http://www.hrmorning.com/heres-why-you-should-pay-interns/
  3. https://www.internmatch.com/guides/faq-and-guide-on-how-to-hire-interns
  4. http://500.co/what-makes-an-intern-a-good-hire
  5. http://www.immagic.com/eLibrary/ARCHIVES/GENERAL/NACE_US/N090318E.pdf
  6. http://www.questia.com/magazine/1G1-17004415/the-intern-turnaround

“Can Academic Credit Replace a Paycheck?” 3 Common Misperceptions About Unpaid Internships

by LaDonna M. Lusher and Christina Isnardi

It’s that time of year again—the time when thousands of aspiring young professionals take a shot at their dreams by working full-time at a summer internship, many of them unpaid. It is the time when students often end up paying to work by investing money in academic credit, commuting costs and office attire for a potentially invaluable professional opportunity. This practice has occurred for years, and is often advised, but are these unpaid internships legal?

Whether for-profit companies are legally obligated to pay their interns depends on whether the interns are considered to be “employees” or “trainees” under the Fair Labor Standards Act.1 The United States Department of Labor (“USDOL”) has set forth six criteria to guide employers on circumstances that may justify an unpaid internship:

  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 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.2

With these guidelines in mind, here are three common misperceptions about unpaid internships.

MISPERCEPTION #1: If an intern receives academic credit for the internship, the employer does not have to pay the intern

FACT: Receiving academic credit does not automatically exempt interns from receiving payment. Under the USDOL guidelines, an unpaid internship must offer training that is similar to a classroom setting. A student in class often observes, listens, and takes notes. Similarly, an unpaid intern receiving academic credit should be offered the opportunity to observe, listen, and take notes in a somewhat structured educational setting within the workplace. If the unpaid intern does work to benefit his employer (i.e., compiling PowerPoint presentations, analyzing reports, running errands), the intern is doing the work of an employee and should probably receive payment. This is also true if an intern is primarily performing work along with learning.

MISPERCEPTION#2: If the intern receives a stipend, the employer does not have to pay the intern a minimum hourly wage.

FACT: Some unpaid internships offer modest stipends to compensate interns for their travel expenses or meals. Usually these stipends take the form of a flat dollar amount paid per day or per week. While employers may consider stipends to be a form of compensation for the intern, the employer must still pay the intern a minimum hourly wage if the intern is performing work that benefits the employer.

MISPERCEPTION #3: If an intern contractually agrees to an unpaid position, the employer does not have to pay the intern.

FACT:  Although working unpaid can be acceptable in the public sector, working unpaid in the private sector is subject to different criteria. According to the Fair Labor Standards Act, “employees may not volunteer services to for-profit private sector employers.”3 Therefore, if an intern at a for-profit company is performing work that benefits the employer (such as filing papers, conducting research, or managing projects), any contract or verbal agreement to not pay the intern is invalid and unenforceable, because the intern is likely an employee and should be paid. The fact that the intern agreed to work for free does not matter because the intern is performing compensable work that benefits the employer.  (See guideline #4 in the USDOL six factor test.)

The bottom line is this: if an intern at a for-profit company is doing work that benefits  his or her employer—from coffee-fetching to project management—it is likely that the intern should be paid.  Interns and employers who are participating in internship programs this summer should keep these guidelines in mind as they work collaboratively towards helping interns achieve their dreams, and realize that the work interns perform is likely compensable.

1. See 29 U.S.C. § 203(g).
2. See USDOL Fact Sheet #71:  Internship Programs Under the Fair Labor Standards Act (2010).
3. See 29 U.S.C. § 203.