New York Unpaid Internships

Unpaid Internships In New York

Most unpaid internships are illegal.  The New York State Department of Labor has issued a fact sheet detailing when so called “interns” must be paid at least minimum wage. The fact sheet sets forth a stringent eleven-factor test. Far too many companies exploit employees under the guise that their work is an unpaid internship. More often than not, the company is simply benefiting from unpaid labor.

Below, we detail the eleven factor test employed by the New York State Department of Labor to determine whether someone fits the definition of an unpaid intern, or is really an employee entitled to wages.

11-Factor Test for Unpaid Internships

1. The purpose of the unpaid internship is training.

It is an internship, not a job, so the intern must be trained to do something. Moreover, the training must be similar to the type of training provided in an educational program. An employer cannot simply rely on the argument that, because the intern is learning on the job, he/she is not entitled to wages. The training has to be similar to classroom learning.

2. The training benefits the intern.

The intern, not the employer, must be the primary beneficiary of the training.

3. The intern does not displace regular employees and works under close supervision.

If the intern is doing work that would otherwise be performed by a paid employee, the intern should probably receive pay for that work as well.

4. The activities of the intern do not provide an immediate advantage to the employer.

In fact, on occasion, the employer’s operations may even be impeded. The nature of an internship is that it is for the benefit of the intern – not the employer. Thus, if the work of the intern provides an immediate advantage to the employer, it is probably not an internship.

5. The intern is not necessarily entitled to a job at the end of the internship.

Employers may not use an unpaid internship as a trial period. It is an internship, not an audition.

6. The interns are told – in writing- that it is an unpaid internship and that they are not considered employees for purposes of the minimum wage laws.

7. Training is done under the supervision and direction of people who are knowledgeable and experienced in the activity.

8. The intern does not get employee benefits, like health, dental, pension, etc.

9. The unpaid internship training is general in nature and prepares the intern to work in a similar business.

It is not designed with a specific job for the employer in mind. In other words, it is not a training program for the company, it is a training program for the intern in a more general sense.

10. The intern screening process is not the same as the employer’s regular hiring practices.

Interns and employees are different and should be treated differently.

11. Advertisements, postings, or solicitations for the unpaid internship clearly discuss education or training, rather than employment

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Employers are, however, permitted to indicate that qualified graduates may be considered for employment.

New York State Human Rights Law to Protect Unpaid Interns

In July 2014, Governor Andrew Cuomo signed legislation that amended the New York State Human Rights Law to protect unpaid interns throughout the State of New York and provide them with the same state law protections against discrimination and sexual harassment in the workplace that paid employees are afforded.  The amended law took effect immediately.  Earlier in 2014, the New York City Council passed an amendment to the City’s Human Rights Law to extend its anti-discrimination and anti-harassment provisions to unpaid interns. The amendments of the New York City and New York State Human Rights Law to protect unpaid interns were inspired by a 2013 case in the Southern District of New York, in which an unpaid intern's claim for hostile work environment that was brought under the New York City Human Rights Law and New York State Human Rights Law was dismissed.  The claim was dismissed because the District Judge held that as an unpaid intern, the plaintiff did not meet the definition of “employee” and therefore was not covered by the provisions of either the New York City Human Rights Law or the New York State Human Rights Law.

Now that the amendments of the New York City and New York State Human Rights Law to protect unpaid interns are effective, employers who have unpaid interns might want to revise their anti-discrimination and anti-harassment policies to explicitly provide that discrimination and harassment against interns will not be tolerated, and that complaints made by interns regarding alleged unlawful harassment will be investigated in the same manner as complaints made by paid employees.

The amendments also highlight the recent expansion of interns’ rights, including the limitations on an employer’s ability to classify individuals as interns rather than employees -- employers should make sure that unpaid interns truly qualify as unpaid interns, and are not actually “employees” who are entitled to the minimum wage and overtime protections of the Fair Labor Standards Act and New York wage and hour laws.