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When are Unpaid Internships in Violation of the Fair Labor Standards Act?

By Dan Atkerson on April 12, 2017

Are unpaid internships illegal?There have been several cases over the last several years involving unpaid interns filing class action lawsuits to recover wages. MGM recently settled for $232,500 with unpaid interns it had hired. According to the MGM intern who filed the lawsuit, she was hired to perform entry-level work. Similar lawsuits were filed against Comcast, Conde Nast and Viacom. Unpaid internships may be illegal if they are not educational and for the benefit of interns.

There are some cases where unpaid internships at for-profit organizations are in violation of the Fair Labor Standards Act. The Department of Labor has six criteria that must be met for an unpaid internship to be considered lawful.

  1. Internships must be similar to the type of training which would be given in an educational environment.
  2. Internships must be for the benefit of interns. For-profit organizations cannot receive the primary benefit.
  3. Interns cannot be hired to replace existing employees.
  4. For-profit organizations cannot gain immediate advantages from the activities of interns.
  5. Interns are not necessarily guaranteed jobs after internships end.
  6. The organization and intern understand there is no guarantee of wages during the internship.

Can Unpaid Interns File Lawsuits for Back Pay?

Unpaid internships should be educational and must benefit interns. These positions should be structured to resemble a classroom or academic experience. They must not be used to augment an organization’s existing workforce. If an employment relationship exists, organizations are required to pay interns minimum wage.

Depending on the circumstances, unpaid interns may be able to file class action lawsuits for back pay. Dallas labor law attorney Dan A. Atkerson can help victims of wage theft look at available legal options.

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