Court Decisions Challenge Legality of Unpaid Internships
It's not unusual for college students to pursue an unpaid internship to build experience in hopes of gaining a fulltime position upon graduation. In fact, Intern Bridge, a research firm, estimates that more than 500,000 undergraduate students participate in unpaid internships yearly.
While Intern Bridge did not assign a cost to this labor, it's easy to estimate that if 500,000 interns work fulltime for nine weeks at the federal minimum wage of $7.25 an hour, it equates to more than $1.3 billion in "free" work for their employers.
However, a recent court case, Glatt v. Fox Searchlight Pictures, has challenged the idea of unpaid internships, leaving many questions and concerns for workforce planners. The decision also has implications in education.
Alexander Footman and Eric Glatt worked for Fox Searchlight Pictures as unpaid interns in New York on production of the movie Black Swan. They sued the company in 2011 claiming that they were asked to perform several tasks, such as filing, running errands, building office furniture, answering phones, making travel plans, managing invoices, etc., that a regular paid employee would do. Therefore, they were entitled to compensation as well. Mr. Glatt's boss confirmed, "If Mr. Glatt had not performed this work, another member of my staff would have been required to work longer hours to perform it, or we would have needed a paid production assistant or another intern to do it."
According to the New York Times, Judge William H. Pauley III, a Manhattan Federal District Court judge, ruled that Fox Searchlight had violated minimum wage law by not compensating interns, as they were performing duties typically performed by other paid employees. Judge Pauley noted that while they did receive references, knowledge, and experience for their resumes, "Searchlight received the benefits of their unpaid work, which otherwise would have required paid employees."
A former intern of Harpers Bazaar sued Hearst Magazines in February 2012, arguing that she had worked 40 to 55 hours a week with no pay, performing duties that paid employees were also doing. In July, a federal court judge ruled that she could proceed with her lawsuit as a collective action, representing all unpaid interns of the magazine since February 2012. Another suit for $50 million was also brought this past February against Elite Model Management by an unpaid intern with similar claims.
While the long-term impact of the Glatt ruling, and others like it, is still unknown, they have, at the very least, raised some important questions for HR departments in organizations across the country. Talent managers should consider how these decisions affect staff planning, budgets, internship programs, and more. Specifically, K-12 HR directors may be called upon to look at how they employ 'interns' as organizations utilize 'help' from many sources and for different purposes.
What are your reactions to this case or the judge's ruling?