We've written before about the benefits and potential pitfalls of hiring interns. While most employers are aware of state and federal regulations governing wages and hours worked, the rash of intern lawsuits over the past few years have demonstrated that employers are still confused about how to comply. Last year, unpaid interns launched several high profile lawsuits against Fox Searchlight, the Hearst Corporation and PBS's "Charlie Rose" show, claiming that they should have been paid based on the type of work they performed. Private sector internships must meet certain Department of Labor criteria in order to be "unpaid," otherwise the intern will be considered an employee, and wage and hour requirements apply.
However, even paid internships can lead to wage and hour woes. A wage and hour class action was recently filed against Hamilton College by a former paid intern. The intern claimed the college intentionally misclassified him and other interns as exempt from minimum wage and overtime pay. See Kozik v. Hamilton College. The complaint asserted that the college lacked funds to hire full-time assistant coaches and used interns instead, requiring them to work up to 100 hours per week below minimum wage.
Employers should be very cautious when paying interns to ensure compliance with minimum wage and overtime requirements under the Fair Labor Standards Act and applicable state law.