The 2nd Circuit recently issued an opinion regarding whether unpaid interns at for-profit employers are actually employees for the purpose of the FLSA and NY labor law, which would entitle them to minimum wage and overtime. The case arose out of interns who worked on the film “Black Swan” in New York. Their intern duties were traditionally menial — one included “keeping the take‐out menus up‐to‐date and organized.” The Second Circuit reversed a grant of summary judgment and remanded, holding that the district had applied the wrong test.
Here is the guts of the holding:
Instead, we agree with defendants that the proper question is whether the intern or the employer is the primary beneficiary of the relationship.
In the context of unpaid internships,2 we think a non‐exhaustive set of considerations should include:
1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands‐on training provided by educational institutions.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
Applying these considerations requires weighing and balancing all of the circumstances.
I think the court really blew it with point 1, since they state earlier that employees cannot waive FLSA protections because that would be inherently unfair and defeat the purpose of the statute. That factor would instead lead to “if we really really tell you we intend to violate the law, then you might have to suck it up.” That seems like a poor way to run a railroad.