It's June, and the summer interns have arrived. But before you have them do menial jobs all summer that should be the work of a paid employee, you may want to consider a recent court ruling that could have implications for many industries that hire unpaid interns.
On Tuesday, a Federal District Court judge in Manhattan ruled that Fox Searchlight Pictures violated minimum wage laws by not paying interns who worked on the 2010 movie Black Swan. Two interns for the film, Eric Glatt and Alexander Footman, filed a lawsuit in 2011 alleging they had performed essential tasks (answering phones, tracking purchase orders, making copies) that should have been done by paid employees. U.S. District Judge William H. Pauley III agreed: "Considering the totality of the circumstances, Glatt and Footman were classified improperly as unpaid interns and are 'employees,' " he wrote in the ruling. A 20th Century Fox spokesperson told the New York Times that it believed the court's rulings were wrong, and would seek to reverse them.
So does this mean all internships need to be paid? No. The Department of Labor has guidelines for unpaid internships that uses six criteria to determine whether an unpaid internship is acceptable under the Fair Labor Standards Act. They include the following: that the internship is similar to training in an educational environment; that the experience is for the benefit of the intern, not the employer (who may actually lose out on efficient operations by what it offers); and that the intern does not displace paid employees.
Observers are mixed on how much of an impact the ruling will have on workplaces that have been increasingly relying on unpaid students, unemployed workers or career changers. Some attorneys and law professors say the ruling should prompt many employers to take a closer look at their programs. Ross Eisenbrey, vice president at the Economic Policy Institute, wrote that the ruling "could be a turning point in the battle to prevent the erosion of labor standards in the United States." And the author of the book Intern Nation calls it "the beginning of the end of unpaid internships."
That said, one Chicago lawyer and expert on corporations' use of interns told The Daily Beast it's unclear the ruling will prompt a sea change for employers and contradicts a recent dismissal of a class-action lawsuit brought by interns against Hearst Magazines. “It is a ruling by one judge," she told the publication.
Unpaid internships may have become more common in today's economy--so much so that they've inspired the bro-comedy duo Vince Vaughn and Owen Wilson to make a film poking fun at what it's like to intern at Google after becoming unemployed. (It's worth noting that Google internships, unsurprisingly, are nothing like those depicted in the movie, and, according to reports from the job-rating Web site Glassdoor.com, are hardly unpaid.)
If structured correctly, unpaid internships certainly have their place. But the detrimental impact of bringing on a bunch of interns and paying them nothing to do work that entry-level employees would otherwise do goes beyond legal headaches. It risks sending the signal that leaders are unwilling to invest in young talent, don't value the basic jobs that keep a workplace humming, and have some pretty short-term views on filling their ranks for the future.
Jena McGregor is a columnist for On Leadership.