The unpaid internship saga continues…
Yesterday, Conde Nast—the media giant and publisher of many popular magazines, including Vanity Fair, Vogue and The New Yorker—announced it was ending its internship program after two lawsuits by former interns who claimed the magazine paid them less than $1 an hour.
The interns claimed they weren’t getting enough training and other benefits from their internships to justify such little pay. Federal labor rules require that for-profit companies pay their interns at least minimum wage unless they meet six criteria laid out by the Fair Labor Standards Act. The criteria include that the internship must include training and education, must benefit the intern—not the business—and must not displace current employees.
Conde Nast is among several large media and film companies to get lobbed with intern lawsuits in recent years. Others companies with similar lawsuits have included Fox Searchlight, Gawker Media and Hearst.
Conde Nast is, however, the first to announce it would stop taking interns altogether. Now the question becomes: Will other companies with unpaid or low-paid interns will follow suit and decide the risk of taking on internships is too great?
Many experts think more companies will decide to do away with them. “I think we may be at the very early stages of a significant backlash against an internship phenomenon that has gone off the rails,” Ross Perlin, author of the book Intern Nation told Time magazine last year.
After the financial crisis is 2008, many companies—large and small—turned increasingly to interns. The idea was that college students or recent college grads could get valuable experiences while the companies could reduce their labor costs. It seemed like a win-win.
But recent wave of lawsuits against large companies means businesses of all sizes need to be more careful about how they use interns and pay them. In an article I wrote a few months ago, employment attorneys laid out tips for setting up an internship program. Experts I interviewed said businesses shouldn’t end their internship programs, because they are valuable to both the businesses and the interns. However, they said companies that offer internships should pay their interns at least minimum wage to avoid run-ins with the law.
“In the grand scheme of things, it’s way cheaper [to pay an intern minimum wage] than what you’re going to pay lawyers to handle these claims in court or deal with IRS audits and penalties,” said Robin Bond, a Wayne, Pennsylvania lawyer who consults small businesses.
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