During the black days of the current recession, many graduates from American universities found that the only way to gain entry to the job market was through internships where they could gain some experience that could be parlayed into a paying job. In many cases the internship was a position that did not offer any pay or only nominal reimbursement. Given the offer of an ever increasing supply of recruits who were willing to work without pay, employers, rightly or wrongly, were quick to take advantage of internships to ease their financial situation. Unfortunately, that phenomenon may be coming to an end. Recently, a couple of high profile employers have been found to have violated employment laws by not paying interns as other employees.
Two interns who worked for Fox Searchlight Pictures on the production of the film “Black Swan” were found by a federal district court to have performed exactly the type of activity that employees would normally perform. As a result, such interns were subject to minimum wage requirements. As the job market improves, it should be anticipated that those who are able to move to paid positions will be more likely to allege that their former unpaid internship positions were disguised employment situations for which they should now be compensated. While it has not outlawed the practice of internships per se, the Department of Labor has published criteria for differentiating an internship from regular employment and highlighting situations in which an internship may be appropriate. Employers should use those criteria to determine whether an unpaid internship is appropriate under their particular circumstances.