Federal and Oregon law require that all employers pay their employees. But does the law require that interns be paid? Maybe, maybe not. It depends on whether the worker meets a fairly stringent legal test. There has been a recent a uptick in litigation over whether workers are actually bona-fide interns (which need not be paid wages), or employees in disguise (which are entitled to minimum and overtime wages).
Generally, courts look the following factors to determine whether a worker is properly classified as an intern or employee:
- 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.
- The internship experience is for the benefit of the intern.
- The intern does not displace regular employees, but works under close supervision of existing staff.
- 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;
- The intern is not necessarily entitled to a job at the conclusion of the internship
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
There have been several high-profile internship cases lately. For example, in June 2013 a New York judge ruled that two workers were misclassified as interns and should have been paid for their work on the famous film, The Black Swan. Because the workers conducted tasks that normally would be done by employees and their labor was primarily for the benefit of Fox Searchlight and not for their own educational or career advancement, the judge determined that they should have been paid for their work. In October 2013, publishing giant Condé Nast faced similar complaints from interns working for magazines the company published. In the face of these complaints Condé Nast scrapped their internship program. Both the film and media industry routinely used unpaid interns in the past.
Closer to home, in November, 2013 the Bureau of Labor and Industry here in Portland, Oregon made a decision that one worker at the Portland Timbers Franchise was misclassified as an intern and should have been paid for her work as an employee. The worker in question was supervising paid coaches at a soccer camp for weeks at no pay without receiving any significant training and educational benefit.
Our office has prosecuted and defended wage claims stemming from unpaid internships. If you are an employee or employer with questions about internship pay obligations, we can help.