A Southern New York District Court ruled that Fox Searchlight Pictures violated federal and New York minimum wage laws by not paying their production interns. The court found that interns Glatt and Footman were both employees under the state and federal law and should have been paid.
Sally Abrahamson, employment attorney with Outten and Golden in New York, and one of the attorneys representing the interns, said that the court looked at the kind of work they did and said that it was the type of work an employee does and therefore, they should have been paid.
Abrahamson says the court relied on the Department of Labor's six factor test to determine whether or not an internship can be paid. Some of these factors include that an internship program must be akin to a vocational or educational program, the program needs to be for the benefit of the intern, not the employer, and that the intern has to know that they're not entitled to a job at the end of the program. If these criteria aren't met, the intern needs to be paid.
The court found that the interns didn't derive anything had they just been an entry-level employee, says Abrahamson and that Fox Searchlight Pictures derived an advantage from their work, no matter how menial the task.
Abrahamson thinks companies will take a hard look at their internship programs as a result of this case. With the downturn of the economy, a lot of businesses developed internship programs to replace entry-level employees. She says that what's not okay is for a business to replace the word entry-level employee with intern and not pay them.
There is also a big misconception about an intern receiving college credit and not paying them and whether or not they're paid is dependent upon the internship program the employer has set up, Abrahamson says.
Abrahamson says that the safest thing for an employer to do is pay their interns and if they're not going to do that, they really need to get legal counseling to be sure they're compliant with the Department of Labor's guidelines.
Sally Abrahamson is an employment attorney with Outten and Golden in New York. For more information about her and her work on this case, click here. She spoke with The Employment Law Channel, providing online, on-demand employment law video content.