For students looking to break into difficult fields, internships have traditionally been the go-to option, even if they are unpaid. But the future of unpaid internships is uncertain after a federal judge in New York ruled this week that Fox Searchlight Pictures violated minimum wage and overtime laws by not paying interns who worked on the production of the 2010 movie Black Swan.
In the ruling, U.S. District Judge William H. Pauley III measured the company against a six-part test outlined by the Labor Department for determining whether an internship can be unpaid. Under the test, the internship must be similar to an educational environment, run primarily for the benefit of the intern as opposed to the employer, and the intern’s work should not replace that of regular employees.
Pauley said Fox should have paid the two interns who filed the lawsuit because they did the same work as regular employees, provided value to the company, and performed low-level tasks that didn’t require any specialized training.
The interns, Eric Glatt and Alexander Footman, organized filing cabinets, tracked purchase orders, made copies, drafted cover letters, and ran errands.
“Undoubtedly Mr. Glatt and Mr. Footman received some benefits from their internships, such as resume listings, job references, and an understanding of how a production office works,” Pauley wrote. “But those benefits were incidental to working in the office like any other employees and were not the result of internships intentionally structured to benefit them.”
Chris Petrikin, a spokesman for 20th Century Fox, said the company believes the ruling was erroneous and plans to appeal.
Juno Turner, an attorney for the plaintiffs, said it was the first time a court had given employee status to young people doing the types of duties commonly associated with interns. Two other cases in recent years also have claimed all interns should be paid.
The decision may cause some companies to reconsider whether offering unpaid internships is worth the legal risk.
“I’m sure this is causing a lot of discussions to be held in human resource offices and internship programs across the country,” said David Yamada, professor of law at Suffolk University in Boston.
There are up to 1 million unpaid internships offered in the United States every year, said Ross Eisenbrey, vice president of the Economic Policy Institute, a liberal-leaning think tank, who blamed companies for exploiting young workers and driving down wages.
But some question whether insisting all interns be paid will accomplish the desired goal. Raising the risk factor for companies hiring unpaid interns may not cause them to hire the same people for pay. It may make them wonder whether an employee with no experience, fresh out of college, is worth minimum wage to them. If not, the ruling may mean college graduates already struggling to find jobs now will have trouble finding experience as well.