Recently, two individuals who worked as ‘unpaid interns’ for the feature film The Black Swan filed a lawsuit against the film’s production companying arguing that the production company violated a variety of minimum wage and other labor laws through the hiring of unpaid help. The basis of the suit stems from the Fair Labor Standards Act (FLSA) which establishes a national minimum wage, guaranteed overtime compensation, and prohibits certain forms of child labor through businesses who engage in “for profit” activity through interstate commerce. As film production companies release movies for profit and in more than one state (interstate), FLSA certainly governs employment responsibilities of production companies. Additionally, while our example is a film production company in the entertainment industry, this brings up an important question to any business owner who sells any product on the internet:(the Internet is interstate commerce!): can you have unpaid interns?
The answer is maybe. The drafters of FLSA specifically included an unpaid internship exception with a corresponding six part test to determine whether a certain internship is eligible for unpaid status. The following six criteria must be applied when making a determination of unpaid intern status:
1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
If ALL, not four, not five, of the factors above are met, an employment relationship between a company and worker is not considered as “employment” under the FLSA and the worker is not eligible to receive the protections of the act. Lastly, this is a bird’s eye view of the topic, as a determination of unpaid internship status is more complicated than six bullet points. It is in your best interest to contact an attorney experienced with this subject before taking on any unpaid internet.
Bradley Legal Group, P.A. are Intellectual Property lawyers, Entertainment lawyers and Music lawyers servicing clients in Miami, Fort Lauderdale, Boca Raton, West Palm Beach, Orlando, and Nashville. We also affiliate with entertainment lawyers licensed in New York and Washington, D.C. © 2012 Bradley Legal Group, P.A.