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Your Legal Corner - Client Alert Blog

California Law on Hiring Unpaid Interns

Written By: Melissa C. Marsh, Esq., California Attorney, May 2012 Add to Favorites
On March 14, 2012, in New York, Lucy Bickerton filed a class action lawsuit against Charlie Rose and Charlie Rose, Inc., on behalf of herself and all other unpaid interns.

According to the Complaint:

“Unpaid internships have proliferated among white collar professions, especially in fields like politics, film, fashion, journalism and book publishing. However, the practice of classifying employees as ‘interns’ to avoid paying wages runs afoul of state wage and hour laws, which require employers to pay all workers who are ‘permitted or suffered to work’ the minimum wage and overtime.”

The Complaint thereafter alleges that:

“According to the New York State Department of Labor (“NYSDOL”), an unpaid internship is only lawful in the context of an educational training program, when the interns do not perform productive work and the employer derives no benefit. [Citation] “If an employer uses trainees as substitutes for regular workers or to augment its existing workforce during specific times or in general, these interns would be treated as employees.” The NYSDOL’s test, mirroring that of the U.S. Department of Labor, is based on the United States Supreme Court’s 1947 decision in Walling v. Portland Terminal CO., [Citation] which held that the federal definition of “to employ” as “suffer or permit to work” does not include student participation in an educational or vocational training program, so long as the employer derives no benefit from the trainees’ work. [Citation] The Court cautioned against arrangements “in which an employer has evasively accepted the services of beginners at pay less than the legal minimum without having obtained permits from the [Secretary of Labor] …

This is just one of the many lawsuits recently filed by attorneys seeking compensation for unpaid interns. In September of 2011, a similar lawsuit was filed against Fox Searchlight Pictures, Inc. In February of 2012 another similar lawsuit was filed against Hearst Corp. Now a third lawsuit against Charlie Rose has been brought in March of 2012. Although all three of these lawsuits were filed in New York, it is only a question of time before California employment law attorneys begin bringing similar PAGA lawsuits in California where the penalties for failure to pay the state’s minimum wage can lead to extraordinary penalties plus an award of the plaintiff’s attorneys fees and costs.

California employers should immediately check to ensure that their unpaid internship programs comply with both California law and if applicable federal law. Any written policies regarding unpaid interns should also be reviewed. For more information on the laws governing unpaid interns in California, please see Are Unpaid Internships Legal In California? Probably Not! This article sets forth the six (6) criteria all of which must be met to legally retain an unpaid intern in California.

One thing is clear, if the employer is not in compliance, it is only a question of time before that employer will be forced to pay handsomely for employees misclassified as unpaid interns. For more on the penalties that can, and typically will, be levied against a California employer for misclassifying an employee (even as an unpaid intern), please see my article Fines and Penalties if California Employees Are Misclassified. Whether the employee is misclassified as an independent contractor, or an unpaid intern, the penalties are very similar.

Tags: interns, unpaid interns
Posted In: Employment Law News 

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Disclaimer: The information presented on this web site was prepared by Melissa C. Marsh for general informational purposes only and does not constitute legal advice. The information provided in my articles and alerts should not be relied upon, or used as a substitute for professional legal advice from an attorney you retain to advise or represent you. Your use of this Internet site does not create an attorney- client relationship. Transmission of this article is not intended to create, and receipt of it does not constitute, an attorney-client relationship. All uses of the contents of this site, other than personal uses, are prohibited. You may print or email a copy of any information posted on this web site for your own personal, non-commercial, use, but you may not publish any of the articles or posts on this web site without the Express Written Permission of Melissa C. Marsh.

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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.