With so many unpaid internship lawsuits making headlines as of late, it is clear that this is a recurring theme in fashion law and the legal field, in general, and it isn't going away. To be sure that you are in line with the law, take a look at the following six criteria. According to the Department of Labor, an unpaid intern program must meet the following factors as provided by the Fair Labor Standards Act in order to be considered an intern, as opposed to an entry-level employee, who must be paid:
1. The internship is similar to training that would be given in an educational institution.
The more an internship program is structured around a classroom or academic experience, as opposed to the employer’s actual operations, the more likely the internship will be viewed as an extension of the individual’s educational experience (this often occurs where a college or university exercises oversight over the internship program and provides educational credit. However, simply receiving academic credit is not always enough to prevent an intern from bringing a successful lawsuit).
2. The internship experience is for the benefit of the intern.
This means that the more the internship provides the "intern" with skills that can be used in multiple employment settings, as opposed to skills particular to one employer’s operation, the more likely the intern would be viewed as receiving training.
3. The intern does not displace a regular employee, and works under close supervision of existing staff.
If an employer uses interns as substitutes for regular workers or to supplement its existing workforce during specific time periods, these interns should be paid at least the minimum wage and overtime compensation, if applicable.
4. The employer derives no immediate advantage from the activities of the intern and, on occasion, its operations may actually be impeded.
If the interns are engaged in the operations of the employer or are performing productive work, such as filing, performing other clerical work, or assisting customers, then the fact that they may be receiving some benefits in the form of a new skill or improved work habits, does not preclude them bringing a lawsuit. This is because the employer is benefitting from the interns’ work.
5. The intern is not necessarily entitled to a job at the conclusion of the internship.
Unpaid internships generally should not be used by the employer as a trial period for individuals seeking employment at the conclusion of the internship period. If an intern is placed with the employer for a trial period with the expectation that he or she will then be hired on a permanent basis, that individual generally would be considered an employee.
6. The employer and the intern understand that the intern is not entitled to wages.