Criminal Background Checks and the EEOC
Using unpaid interns is a standard practice for many employers. Recently the Southern District of New York issued an opinion that may cause many employers to re-think their use of unpaid interns. In Glatt v. Fox Searchlight Pictures, Inc., __ F. Supp. 2d __, 2013 WL 2495140 (S.D.N.Y. June 11, 2013), the court found that the unpaid interns that worked for a production company on the film Black Swan were entitled to wages.
The court had to go through two steps to determine if the interns were entitled to wages. First, were the interns employees under the Fair Labor Standards Act (FLSA)? Second, if the interns were employees, did the interns fall under the trainee exception? Almost all interns will be considered employees under the FLSA, so the second step is usually dispositive.
For the second step the court relied on Department of Labor regulations promulgated in 2010 that identifies a six-factor test under the FLSA to determine if a worker is a trainee or an employee. First, the training must be similar to that in a vocational school or educational instruction. Second, the training should be for the benefit of the trainees. Third, the trainees should not disrupt regular employees, but work under close supervision. Fourth, the employer that provides the training should derive no immediate advantage from the trainees. Fifth, trainees are not necessarily entitled to a job at the conclusion of the training period, and finally the employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.
The Eleventh Circuit has also applied the Department of Labor’s six-factor test for trainees in Kaplan v. Code Blue Billing & Coding, Inc., 504 Fed. Appx. 831 (11th Cir. Jan 22, 2013), finding that unpaid interns who received academic credit for their work, were supervised closely, and did not displace regular employees fell under the trainee exception.
In the exceptionally litigious area of wage claims, it is best practice for an employer to have a consistent policy on unpaid internships that can be justified under the Department of Labor’s guidelines.