In September 2013, I wrote a post about the Black Swan case, in which a federal judge ruled that Fox Searchlight Pictures violated the Fair Labor Standards Act by not paying interns during the production of the 2010 movie “Black Swan.” (It was one of our most popular posts!)
The judge ruled the interns performed the same work duties for which others were paid and the internships didn’t provide an educational environment, but instead benefited the studio.
Now, just two years later, the U.S. Court of Appeals for the Second Circuit has thrown a boon to employers – but a blow to interns.
On July 2, it ruled the Federal District Court in the Black Swan case used an incorrect standard – one set by the Department of Labor – to define an internship, declaring that as long as work serves an educational purpose, it can considered an internship – paid or unpaid. Using this test, a person is an employee only if the employer benefits more from the relationship than the intern.
Cutting through the legalese: This could make unpaid internships much easier to justify, and could lead to a surge of them in the workforce.
It’s a touchy conversation among millennials, most of whom expect to get paid for their services. As I wrote in the post two years ago, interns are no longer the “coffee getters” and “copy makers.” Most employers consider interns valuable team members and delegate professional responsibilities to them – many of the same responsibilities for which employees receive compensation.
But the argument remains: Does professional experience outweigh money?
The National Association of Colleges and Employers issued a statement on July 2 in response to the U.S. District Court’s ruling, saying, “At the foundation of such an assessment is the tenet that the internship is a legitimate learning experience benefiting the student and not simply an operational work experience that just happens to be conducted by a student. The core question, according to NACE, is whether or not work performed by an intern will primarily benefit the employer in a way that does not also advance the education of the student.”
- The experience must be an extension of the classroom: a learning experience that provides for applying the knowledge gained in the classroom. It must not be simply to advance the operations of the employer or be the work that a regular employee would routinely perform.
- The skills or knowledge learned must be transferable to other employment settings.
- The experience has a defined beginning and end and a job description with desired qualifications.
- There are clearly defined learning objectives/goals related to the professional goals of the student’s academic coursework.
- There is supervision by a professional with expertise and educational and/or professional background in the field of the experience.
- There is routine feedback by the experienced supervisor.
- There are resources, equipment and facilities provided by the host employer that support learning objectives/goals.
- Unpaid internships in the not-for-profit sector reflect the fiscal realities and limitations for organizations in that sector and are acknowledged accordingly in current Department of Labor guidelines and enforcement practices.
- All interns, regardless of their compensation, should enjoy similar basic protections in the work setting consistent with all laws, ethical considerations and sound business practices.
At the same time, NACE’s 2015 Internship & Co-op Survey found the current overall average hourly rate for bachelor’s degree-level interns, adjusted for inflation to 2010 levels, is $15.98. In comparison, the average hourly rate for interns was $17 in 2010.
While associations and nonprofits may not be first of mind for interns, they offer valuable experiential learning experiences, wrote Todd Van Deak, president and founder of Philadelphia-based TVD Associates, in an October 2013 Event Garde post.
So it’s important to consider how your organization could enhance interns’ educational experiences.
As a follow up, tell us…do you pay your interns? Why or why not?