September issues aside, the hottest item among former fashion interns is the class-action lawsuit.
Fashion houses and publications have long offered unpaid internships to attract and identify talent in exchange for the intern’s chance to gain practical education, skills, and experience, not to mention invaluable connections in the industry. Such unpaid internships, though often unglamorous and legendary for laughably menial tasks imposed by strict task masters on even stricter deadlines (think Devil Wears Prada), are highly sought after, astonishingly competitive, and endured by hopeful, fashion-struck newbies looking to gain industry insights and make connections that could launch satisfying careers. But recently it seems those connections and educational experiences are not enough. Fashion interns want to be paid, too.
Last week, The Row’s Mary-Kate and Ashley Olson joined a lengthening line of fashion professionals sued by former unpaid interns who allege that unpaid internships are a thinly-veiled way to recruit free labor. The representative plaintiff in the class-action filed against The Row’s parent company, Dualstar Entertainment Group, alleges she performed the same photocopying, sewing, cleaning, and personal errand running tasks as full-time employees. She claims her experience was “horrible” and that she often received late night email and was hospitalized for dehydration related to physical demands of the internship.
Since Fall 2014, Lacoste, Burberry, Zac Posen’s House of Z, Marc Jacobs, Oscar de la Renta, Calvin Klein, Kenneth Cole, and Gucci have each been sued on similar allegations by plaintiffs claiming that fashion interns are really misclassified entry level employees who work for no pay and no educational experience. Will this trend mark the end of unpaid fashion internships? It shouldn’t.
Under the Fair Labor Standards Act, employers must pay minimum wage to all employees – that is, anyone who suffers work or is permitted to work. But an exception to this rule arises when someone works for his or her own advantage on another’s premises. An unpaid internship offering an educational opportunity or chance to gain practical knowledge and skill in a chosen industry can fit squarely within this exception.
To assist employers in evaluating whether an internship program would be exempt, the U.S. Department of Labor recognizes six criteria that indicate an employer would not be required to pay participating interns minimum wage:
- The internship program is similar to training given in an educational environment;
- The internship program is for the intern’s benefit;
- The intern does not displace regular employees but works closely with them;
- The employer derives no immediate advantage from the intern’s activities – it may even occasionally have operations impeded by the intern;
- The intern is not necessarily entitled to employment when the internship ends; and
- Both employer and intern understand that the intern is not entitled to wages for time spent in the internship program.
Fashion professionals interested in establishing an unpaid internship program should review these factors to determine whether all are met. They should also review applicable state laws, which may include additional criteria and safe harbors for unpaid internship programs. Federal law sets the standard. State laws may raise but not lower the bar. And, the employer should set clear expectations and obtain each intern’s written acknowledgment that the internship is unpaid but, in exchange, offers certain educational benefits, skills, and opportunities whether or not the program is completed.