Interns: Know your employment rights and how to protect them

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By Nick Branch, writer for Contact Law

The recent news that unemployment rates have hit a three-year low was an encouraging sign that the economy is finally heading in the right direction.

The news is undoubtedly welcome, but the figures will be of little comfort to the millions of long-term unemployed Americans who will probably wait for a solid job offer before celebrating a change in fortune. The problem is acutely felt by 16 to 24-year olds, where unemployment is currently running at 17.1 percent, rising to almost one in three in some ethnic groups.

With jobs hard to come by, millions of graduates are returning to the internship market year after year to build up their résumés and keep their job skills on point for future opportunities.

Your rights in a “modern apprenticeship”
Internships are a modern form of apprenticeship for white-collar professions. The main difference from an apprenticeship is that an intern is not bound to work for his employer at the end of the training. As a result, internships are seen as a great way to try out different professions and gain on-the-job experience to help you in future interviews.

Like apprenticeships, internships are traditionally paid. This is because the Fair Labor Standards Act 1938 states that anyone who is “suffered or permitted” to work is an employee and must be compensated for the work they perform. Paid interns are therefore entitled to earn the federal minimum wage or the state minimum wage where one exists. Paid interns should also be paid overtime for hours worked above 40 hours per week.

Interns are also entitled to many other employment rights that exist in U.S. and state law, including the right not to be discriminated against on the grounds of race, religion, color, sex, age and national origin. It is also illegal for employers to discriminate against interns on the basis of their disability status.

Unpaid internships
A good number of internships are offered on an unpaid basis, and this practice is increasingly common in today’s tough economic climate.

Unpaid internships for not-for-profit organizations are permitted and may bypass wage laws, but they will still be subject to laws on other aspects of the workplace, including job safety and health and discrimination.

Employers looking to exploit unpaid interns to boost productivity for little or no cost are breaking the law. The spirit of an internship is on-the-job learning, and employers who exploit interns by expecting them to provide valuable work for free may get into trouble with the state labor commissioners and the Wage and Hour Division of the U.S. Labor Department.

 That said, unpaid internships at for-profit companies are not always illegal and are permitted if interns are “serving their own interest” under the instruction of another person.

Understanding your rights
If you are unclear as to whether you should be paid during your internship, the Supreme Court has established the following criteria to determine when an internship is exempt from wage employment laws:

  • The internship is similar to training, which could be given in an educational environment
  • The internship is designed for the benefit of the intern
  • The intern does not do work to displace an existing employee, but is instead supervised by existing staff
  • The intern’s employer derives no benefit from the internship, and in fact, their operation may be impeded
  • The intern is not entitled to a job at the end of the internship
  • The intern and the employer understand that the position is unpaid

Generally speaking, an unpaid internship should be for a set period and should not be used as a trial period prior to an intern commencing employment. Both these factors would steer a court toward ruling that an internship should be paid.

If you believe that your internship may be in breach of employment law, you should consult a specialist labor lawyer for legal advice. Recently, there have been several cases that have challenged the legality of unpaid internships, not least the ongoing action conducted by two unpaid interns against Fox Searchlight for their work on the movie “Black Swan.”

Cases that have been brought against employers for unpaid internships include stories of working long hours, carrying out work that paid employees would normally be expected to complete and supervising other interns. Those brave enough to bring action against an employer realize that doing so may jeopardize their future employment opportunities. However, there is no considerable publicity around the illegality and exploitation of unpaid interns, something which is helping to revolutionize this valuable employment practice.

Nick Branch received his LLB from the University of the West of England in 2004. He then went on to work as a director of two property-related businesses. Nick is now studying to become a doctor on the fast-track graduate entry medicine course at King’s College London and is a regular writer for Contact Law.

2 Comments
  1. A company has hired interns and is paying them $10 an hour, but they are giving them 1099s.  The reason for this is, when they gave them W2′s, when they finished their internship they were filing for unemployment insurance, in trying to avoid this, the company is now giving them 1099′s.  How can they avoid having to pay interns unemployment when they leave is their question?  Are interns allowed to file for unemployment after the term of the internship is over?  Thanks

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