I commented years ago about unpaid internships being illegal. Recently a federal court in New York ruled that the unpaid interns on the film production of Black Swan were actually employees entitled to minimum wage. In addition, the Court ruled that they could proceed with a class action on behalf of various other unpaid interns.
The essential facts of the internship were that the interns performed various tasks for the production company including: obtaining documents for personnel files, picking up paychecks for coworkers, tracking and reconciling purchase orders, making photo copies, and running errands.
The film production company argued that the individuals were "trainees" who were receiving a valuable educational experience and were thus not entitled to wages.
The Court noted that the only exception for trainees is when NO BENEFIT AT ALL is provided to the employer. Thus it is not a balancing test of whether the "internship" is really good for the individual. If the company receives ANY immediate benefit, then the employee must be paid. In analyzing past internship cases, the Court noted that "The Supreme Court did not weigh the benefits to the trainees against those of the [company], but relied on findings that the training program served only the trainees." (See page 21 of the opinion).
Ultimately, the Court found that the "interns" were not "interns" but rather employees. Noting that the "training" provided included routine items such as "how [the company] watermarked scripts or how the photocopier or coffee maker operated." (See page 23). Although the company argued that the "interns" received such benefits as "resume listings, job references, and an understanding of how a production office works," these were the same benefits that any employee working in the office would receive, and the key test is rather whether the company benefited from their work. (Page 24).
The Court used the six-part test outlined by the U.S. Department of Labor which states that ALL of the following must be met in order for an internship to be unpaid:
(1) The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
(2) The training is for the benefit of the trainee;
(3) The trainees do not displace regular employees, but work under close observation;
(4) The employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer’s operations may actually be impeded;
(5) The trainees are not necessarily entitled to a job at the completion of the training period; and
(6) The employer and the trainee understand that the trainees are not entitled to wages for the time spent in training.
Hopefully with the court victory additional unpaid interns will come forward to fight for their rights.