Employment Law – Fox intern lawsuit shows risk of using unpaid workers

What started as a minimum wage and overtime lawsuit by interns on the Fox Searchlight movie Black Swan has now morphed into a wider action that may include other divisions within Fox’s entertainment entities.  Although the lawsuit was filed in New York, this action may now include interns in certain Fox entities in California.

The original lawsuit (click here for a pdf copy) concerned 2 Black Swan unpaid interns who claimed they were owed minimum wages and overtime.  The lawsuit seeks to be a class action, meaning that if the proper procedural requirements are met, the lawsuit may include not only the original 2 interns but also all other interns who had a similar situation (for a more detailed explanation on class action lawsuits in general, click here).

California considers the following factors to determine whether an intern should be considered an employee subject to the usual employment laws: (1) whether the training is similar to that given by a vocational school; (2) the training is for the benefit of the intern; (3) the intern does not displace regular employees; (4) the employer gets no immediate advantage from the work of the intern; (5) the intern is not necessarily entitled to a job after the internship; (6) the employer and intern understand the intern is unpaid; (7) whether the training is part of an educational program; (8) whether the intern receives employee benefits; (9) the training is general vs. specific to that employer; (10) the intern screening process is different than the employee screening process; and (11) ads for the internship is stated in terms of training vs. employment.  For more on this analysis, see this DLSE opinion letter.

Based on these factors, it is very easy for a company to hire unpaid interns and have them be deemed employees.  Companies should seriously analyze their internship programs and treat the interns as employees unless the above factors indicate the interns really can be considered interns.

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