July 8, 2013

Unpaid Interns May Be Considered Employees

Arnold & Porter Advisory

Did you know that unpaid interns may qualify as employees under the Fair Labor Standards Act?

Summer is here and many clients have retained unpaid interns. But, despite the prevalence of this practice, there are liability risks associated with paying interns below minimum wage -- or not paying them at all. In several recently-filed putative class actions, unpaid interns have challenged their unpaid designation: These plaintiff interns have demanded that they be classified as employees under the Fair Labor Standards Act (FLSA or the Act) and sought both minimum wages and overtime pay. This type of FLSA litigation is on the rise
and can potentially result in substantial awards against employers or force employers to enter into costly settlements. Businesses that utilize unpaid interns should be forewarned and take steps to ensure that they have properly classified these individuals as interns.

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