Unpaid Internships: Probably Too Good to Be True

By Dunn, Carney, Allen, Higgins & Tongue

Hollywood is buzzing right now about a recent federal court decision finding a movie production company was in violation of the Fair Labor Standards Act for not paying its interns. This case teaches an important lesson: an internship must be paid unless the position meets ALL of the following criteria:

• The internship is similar to training which would be given in an educational environment;
• The position is for the benefit of the intern;
• The intern does not displace regular employees;
• The employer derives no immediate advantage from the intern’s activities;
• The intern is not necessarily entitled to a job at the conclusion of the internship; and
• The intern is aware that he/she is not entitled to wages.

If the position does not fall within those parameters, the intern will be considered an employee and the employer must pay the intern at least minimum wage, which is currently set at $8.95 an hour in Oregon and $9.19 per hour in Washington. Improperly classifying an employee as an “intern” can result in significant penalties to the employer.

Having someone “volunteer” at your business does not solve the problem either. Only non-profits (religious, charitable or other community service organizations) are eligible to have volunteer workers.

Thanks to law clerk Brittany Medlin for writing this eNews. If you have questions about this issue or any other employment law matter, contact Allyson S. Krueger at 503-417-5461.

Heads up–Our annual employment law seminar has been moved from October 3, 2013 to Spring 2014. Stay tuned for upcoming details.

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