The latest in a line of class litigation lawsuits under the Federal Labor Standards Act (FLSA) and state laws has settled, with Elite Model Management agreeing to pay $450,000. This is the largest settlement for unpaid interns so far.
On the heels of another case involving unpaid interns, it is wise for businesses to re-evaluate their internship programs to ensure they comply with federal and state laws.
The U.S. Department of Labor has laid out six criteria that must be met when for-profit private sector employers have unpaid interns:
- The internship is similar to training that would be given in an educational environment;
- The internship is for the benefit of the intern;
- The intern does not replace regular employees, but still works closely under the supervision of staff;
- The employer derives no immediate advantage from the internship;
- The intern is not necessarily entitled to a job at the conclusion of the internship;
- The employer and intern both understand that the internship will not be paid.
If these criteria are met, the Department of Labor deems that no employment relationship exists, releasing employers from the duty to pay wages. If they do not, then interns are employees, and need to be compensated as such.
If you have questions about unpaid internships, contact a Minneapolis employment lawyer with LeBlanc Law & Mediation at 612-819-9652.
