As summer approaches, many companies will face the tempting invitation from students to work “for free” as interns. While some companies may consider jumping at the chance to enhance their workforce without incurring the costs of compensation, health insurance and other benefits of being an employee, as the U.S. District Court for the Southern District of New York just reminded the business community, having unpaid interns can be perilous if you don’t know – or if you ignore – the law.
Like many businesses, Fox Searchlight Pictures, Inc. hires a number of unpaid interns every year. In 2011, however, several of their “interns” sued, claiming that they should have been paid for the hours they had worked performing routine tasks that would otherwise have been performed by regular employees in connection with the production of the film Black Swan. On June 11, 2013, U.S. District Court Judge William H. Pauley III issued a ruling in which he agreed that two interns, Eric Glatt and Alexander Footman, were “classified improperly as unpaid interns and are ‘employees’…” of Fox Searchlight. Judge Pauley went on to say that these putative interns:
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…worked as paid employees work, providing an immediate advantage to