Under the Fair Labor Standards Act, an internship must a) be similar to training given in an educational environment; b) the experience is for the benefit of the intern (this point is the one most frequently overlooked by employers); c) the intern does not displace regular employers and works under the close supervision of existing staff; d) the employer provides training and derives no immediate advantage from the activities of the intern; e) the intern is not necessarily entitled to a job at the completion of the internship; and finally, f) the employer and intern understand the intern is not to be paid.

To the surprise of many employers, the New York Department of Labor enforces a handful of wage requirements for internships, including written notification to the intern of non-wage status, the prohibition on employee benefits to the intern, and the requirement the general training would qualify the intern to work in any similar business. Additionally, the screening process for the intern should not be the same as for employment, and any solicitations or ads for the internship should clearly discuss education and training, rather than focus exclusively on employment.

When thinking about hiring interns, the goal of helping young individuals learn and grow into successful professionals is an important philosophy underpinning the process, but employers would be wise to keep in mind the laws of the individual states in which they operate, as the failure to follow the letter of the law can be a hugely disruptive and expensive experience. Recently, the debate regarding unpaid internships has exploded with the filing of certain high-profile, class action complaints. For example, in Eric Glatt and Alexander Footman v. Fox Searchlight Pictures, Inc. (S.D.N.Y., Sept. 28, 2011), former “Black Swan” interns accuse Fox Searchlight of failing to pay wages to unpaid interns who performed the work of production assistants, bookkeepers, secretaries and janitors on films produced and co-produced by the company. In Xuedan Wang et al. v. The Hearst Corporation (S.D.N.Y., Feb. 1, 2012), a former intern at Harper’s Bazaar, filed an action against the Hearst Corporation, Harper’s parent company, claiming it failed to pay minimum and overtime wages during her unpaid internship. Most recently, in Dajia Davenport v. Elite Model Management Corporation (S.D.N.Y., Feb. 15, 2013), a former Elite intern alleges the company “deliberately misclassifies its interns as exempt from wage requirements,” then makes them work more than 40 hours a week, including weekends. Finally, Charlie Rose and his production company recently settled a class action lawsuit brought by a former intern for $250,000. The intern, in an action entitled Lucy Bickerton v. Charlie Rose and Charlie Rose, Inc. (Supreme Court of the State of New York, New York County, March 12, 2012), had alleged violations of New York’s labor laws stemming from a failure to pay interns of the Charlie Rose show. As the old adage goes, a word to the wise is sufficient!