Do I Have to Pay Interns?

Many employers hire unpaid interns thinking it is a win-win situation; the intern learns the ropes of the industry and the employer receives free help. There are however very specific criteria which must be met for employers not to be required to pay their interns. On June 11, 2013, in Glatt v. Fox Searchlight, a federal district court judge in New York ruled that unpaid interns working for Fox Searchlight should have been paid for their work under the federal Fair Labor Standards Act.

Judge William H. Pauley III outlined six factors which all must be met in order for employers not to be required to pay their interns:

• 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.

In New York, eleven factors must be met as described by a Fact Sheet issued by the New York State Department of Labor.

We at Jules Halpern Associates have extensive experience drafting and updating employee handbooks, preparing confidentiality policies, independent contractor agreements, auditing employee classifications, and advising on internship issues. If we can be of assistance in any of these areas, please contact us for further information.