Both Hearst Corp. and Fox Entertainment Group Inc. are fighting wage claims with former interns. Recently both claims had their lower court decisions challenged. In the Hearst Corp. wage claim, the former unpaid interns challenged their denial of class certification. Fox, on the other hand, challenged the class certification of its former interns. Both of the claims revolve around the question of whether an intern is an “employee” for wages and hours. However, both appeals are focused on how the court decides who is an “employee.” The answer to these questions will have a significant impact on current and future intern wage claims.
The interns in the Fox lawsuit were granted class status on summary judgment. This means the court had enough information to decide that the interns could make a case and thus certified both class and collective action status without going any further on the issue. The Hearst interns, however, were not granted certification because there was not enough evidence that the various magazines Hearst owns and operates had an overarching policy that applied to all interns. Without a broad policy the interns at the various magazines did not have enough in common to qualify for class action status. But, the judge did not say that the interns were not “employees.”
The judge in the Hearst case used the “primary beneficiary” test. The “primary beneficiary” test looks to see who benefits the most from the internship. Wage and hour laws were created to prevent employers from exploiting their employees. Employers are not allowed to “hire” an unpaid intern to do the work of paid employees in order to benefit from free labor. This means that for an intern to be unpaid and not considered to be an “employee,” they must gain more benefit from the experience than the employer. This test is very subjective and confusing. And while Fox supports this test, the Department of Labor (DOL) has filed an amicus brief, or a friendly brief, with the appeals court recommending the use of the DOL’s six-part test, which is more objective.
Under the DOL’s six-part test, for an internship to be “exempt,” and for the intern to not be an “employee,” the internship must be educational. The internship should also benefit the intern, and the intern should be supervised and not replace a regular employee. Additionally, the internship cannot immediately benefit the employer, and both the employer and employee must know that the internship does not guarantee a job for the intern when completed and that the employee is not entitled to pay.
Since paid interns are considered employees and must receive at least minimum wage and overtime pay under the Fair Labor Standards Act (FLSA), many employers now choose to only offer paid internships. However, if you are or were an intern and believe you are owed overtime wages, contact our team of overtime pay lawyers today at (855) 754-2795 to discuss your situation. Or complete the Free Unpaid Overtime Case Review form on the top right of this page and our knowledgeable legal team will evaluate your case. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.