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Get Your Internship Policies Up to Date

By William Peacock, Esq. on May 15, 2013 | Last updated on March 21, 2019

Last week's Hearst decision may have been a victory for employers, but it doesn't mean all unpaid internships are legal.

The unpaid interns lost on a procedural note -- class certification -- before the case even reached the merits. And while the reverberations from that decision, as well as the Supreme Court's decisions in Comcast and Dukes, will be felt for years by class-action plaintiffs, your company still needs to review its unpaid internship policy.

As a wise man once told me, "Expect the worst -- you'll never be disappointed."

The obvious way to make an internship legal is to pay your interns. Want to avoid minimum wage violations? Pay minimum wage. The federal minimum wage is currently $7.25 per hour. If so many college grads are willing to work for free, imagine the quality of candidates you'll get at a non-livable wage! Plus, once they are paid, you don't have to worry about whether their time spent hustlin' coffee beans outweighs their educational experience.

As for legal unpaid internships, take note of the Department of Labor's six-part test that we discussed in the wake of last week's Hearst decision. What's the short version? Don't replace staff with interns. Obtain no benefit from interns. Educate the interns. Emphasize the terms (in writing): no pay, no permanent gig.

You're probably asking yourself right now: If he can't get me coffee, or provide any other benefit to my business, why the heck do I want an intern? That's an excellent question. Note that none of the six factors are dispositive. An unpaid internship that provides some benefit to you (coffee brewing, file fetching, etc.) while simultaneously having a rigorous educational component, might pass muster once all the factors are weighed.

They Won't Catch You Anyway... Right?

This one's for those companies, like Hearst Corporation, that have decentralized internship programs. Their victory was largely the product of their lack of oversight over individual magazines and internships. The variety of magazines, departments, and individual internship duties and experiences (a fashion intern has a very different experience than an editorial intern) meant that there was no common injury to the class.

The lesson is obvious: If you must have unpaid internships, leave the fine details to each individual department. The more ties to the mothership, the more likely "commonality" will found by a court.

Besides, what's the worst-case scenario? The "Charlie Rose" lawsuit provides some insight. The unpaid interns in that case all worked for the same show (commonality? Probably), were unpaid, and handled menial tasks. They sued and the case settled -- for a whopping $250,000, or $1,100 per intern. At the federal minimum wage, that's a little less than four weeks' worth of full-time wages per intern -- a bargain price for research, press packet preparation, cleaning, and of course, coffee-fetching.

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