A group of unpaid interns have reached a $6.4 million settlement with their employer, NBC Universal. The interns worked on the production of many shows including “Saturday Night Live.” They brought a class action law suit against their employer in July, 2013 and have finally reached a settlement more than a year later. The nearly 9,000 unpaid interns will stand to benefit about $505 each before taxes. This settlement comes after the recent progeny of cases that have increased the legal protection for such interns.
Unpaid interns are becoming the modern-day equivalent of entry-level employees, except that employers are not paying them for the hours they work. This has misled some employers to think that it is okay to classify these employees as interns in order to avoid paying wages. According to the U.S. Department of Labor, an unpaid internship is only lawful in the context of an educational training program when the interns do not perform productive work and the employer derives no benefit. Employers of a for-profit organization must meet a six criteria standard in order to use the services of their unpaid interns. First, the employer must provide an internship that is similar to training which would be given in an educational environment. Second, the internship experience must be for the benefit of the intern. Third, the intern must not displace regular employees, but work under close supervision of existing staff. Fourth, the employer that provides the training must not derive immediate advantage from the activities of the intern. Fifth, the intern is not necessarily entitled to a job at the conclusion of the internship. Lastly, the employer and the intern must understand that the intern is not entitled to wages for the time spent in the internship.
If any of the criteria mentioned above is not met, the employer may have a legal obligation under The Fair Labor Standard Act to pay the interns for their services. Therefore, employers must be prudent in how they implement and utilize internships in order to avoid legal liabilities. It is important for employers to have a structured educational curriculum for their interns. Employers must keep in mind that the interns are there to learn and not to be a replacement for regular employees who work for the sole-benefit of the employer. Furthermore, employers should ask whether he would have to hire new employees or require current employees to work additional hours had the interns not performed the work. If the answer to this question is in the affirmative, the employer may be liable for violating the federal labor law. Thus, it is important for employers to seek legal guidance in order to make sure that the relationship with their interns is within the acceptable labor guidelines.