The Test for Unpaid Interns

The United States District Court for the Southern District of New York recently ruled that Fox Searchlight Pictures violated federal and New York minimum-wage laws by not paying interns who worked on production of the 2010 movie Black Swan.

In its ruling, the Court relied on Department of Labor Fact Sheet #71 to determine that workers classified by Fox as “interns” should have been classified as “employees.”  Whether a worker is classified as an intern or an employee is determinative of whether the worker is subject to state and federal minimum-wage laws.  Employees are subject to these laws, while interns are exempt.  Fact Sheet #71 provides a six-factor test for determining whether a worker should be classified as an intern or an employee, which requires considering whether:

1. The internship is similar to training given in an educational environment
2. The internship experience is for the benefit of the intern
3. The intern does not displace regular employees
4. The employer derives no immediate advantage from the activities of the intern
5. The intern is not necessarily entitled to a job at the conclusion of the internship
6. Both employer and intern understand that the intern is not entitled to wages

Employers should note that each circumstance is unique and should be evaluated based upon all of the facts and circumstances of a particular “internship” program.

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