Rising litigation over unpaid interns has recently split organizations on whether or not to retain their respective internship programs. After being sued by two former unpaid interns, Condé Nast announced in April that the company settled the lawsuit and decided to no longer hire any interns. On the other hand, many unpaid intern programs continue, such as those of local cable news station New York 1 and the weekly newspaper, The New York Observer.
In New York, the Department of Labor (“NYDOL”) has rigorous requirements for an individual to qualify as an intern. Employers may still hire unpaid interns, but they must conform to current regulations to limit potential liability. A summary of the regulations can be found in the NYDOL’s Fact Sheet on Wage Requirements for Interns. The following are key factors for establishing an unpaid internship:
• The internship is for the benefit of the intern;
• The internship provides an experience similar to an academic setting, in which a knowledgeable practitioner oversees the intern’s work;
• The intern does not displace any regular employees and does not receive any employee benefits;
• The interns are notified, in writing, that they will not receive any wages and are not considered employees;
• Advertisements for the position clearly state its academic nature;
• The employer does not derive any immediate gain from work produced by the intern; and
• There is no guarantee of employment upon completion of the program.
Although New York’s requirements are strict, employers should not be deterred from maintaining an internship program as it can positively enhance the organization’s public image. Further, while internships cannot guarantee employment upon completion, a program can create a community of individuals who value the organization and may apply for future positions.
Here are a few practical tips for sustaining a compliant program:
• Direct program managers to ensure interns do not perform production work, such as photocopying or picking up lunch.
• Vary projects and create new experiences, even if instruction and completion of the project may hinder the organization’s production.
• Avoid the appearance of continuous employment by selecting specific start and end dates prior to the beginning of the internship.
• Work with a college or university to create a purely educational experience for the intern, and inquire as to possible academic credit.
• Post advertisements for the position through academic websites and other related platforms.
If an organization cannot meet the NYDOL requirements, the employer needs to adhere to minimum wage and overtime requirements. For those employers that cannot afford to pay an intern minimum wage, creating a plan in advance that adheres to this framework can keep your organization in compliance. In either case, interns can be a valuable asset to an organization.