The Bloomberg BNA Payroll Library gives you reliable, up-to-date guidance and analysis in every area of payroll administration and compliance, and includes hundreds of interactive forms and links to related federal, state, and local sites.
“We're putting in a lot of time on these blogs,” said Dan, an intern at a media company. “I think we're doing as much work as the regular full-time employees.”
“Even though we're interns, we should be paid,” Ron said. “The company definitely benefits from our labor.”
FACTS: A New York media company published blogs about the media industry, with posts about news, technology and pop culture. The duties of two interns, who worked 20 to 24 hours a week, included researching, writing and editing blog posts that were published on the company's website.
The interns also promoted articles on social media websites, moderated comments and managed the online forum. The online community was integral to the employer's business model as an Internet publisher.
One of the interns, who was pursuing a journalism degree, worked at the company's New York office and received academic credit for his efforts. The other, who was pursuing a degree in political science with a minor in creative writing that was focused on journalism, worked remotely from Missouri and did not receive academic credit.
Under the internship program, interns generally were not paid, although there were exceptions.
The two interns filed a lawsuit in an effort to seek back wages on behalf of former interns. The lawsuit, a collective action, claimed that the employer did not pay, or had underpaid, numerous other interns, even though the content they produced generated significant revenue for the company.
ISSUE: Did the employer owe the interns wages under the Fair Labor Standards Act?
DECISION: The media company did not have to pay the interns, a federal district court ruled.
The interns traded their “labor for significant vocational and educational benefits” that resulted from their positions, the court said. The interns were not entitled to wages under the FLSA because they were the primary beneficiaries of the internships, it said.
In the case involving the intern bloggers, the factors were weighed to determine whether an intern or an employer was the primary beneficiary of the relationship.
Interns for an online media company wrote and edited blogs, and also promoted articles on social media websites.
The interns received mentoring that was not provided to employees who “were expected to already possess an advanced journalism skill set,” the district court said.
Diverting the mentoring editor from other tasks benefited the interns, not the employer, the court said. The interns, meanwhile, performed work that benefitted the employer. The mentoring they received was more like hands-on instruction at a journalism school, the court said.
Balancing the factors showed the practical experience the interns acquired outweighed the benefit that accrued to the company, the court said (Mark v. Gawker Media LLC, 2016 BL 97757, S.D.N.Y., No. 1:13-cv-04347, 3/29/16).
POINTERS: The ruling shows that unpaid internships should be structured with “mentoring and oversight in a constructive and educational way,” said Lawrence Peikes, an employment lawyer at Wiggin and Dana LLP. Meaningful oversight at the media company helped distinguish “between what the interns were doing and what the regular, paid employees were doing,” he said.
“The internship itself could be a hindrance to the efficient operations” of the media company, Peikes said.
The Second Circuit, in Glatt v. Fox Searchlight Pictures Inc., provided these nonexhaustive factors for courts to consider when determining the primary beneficiary, to the extent that:
•the intern and employer clearly understand that there is no expectation of compensation, with any promise of compensation, express or implied, suggesting that the intern is an employee, and vice versa;
•the internship provides training that would be similar to what would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions;
•the internship is tied to the intern's formal education program by integrated coursework or the receipt of academic credit;
•the internship accommodates the intern's academic commitments by corresponding to the academic calendar;
•the internship's duration is limited to the period that the internship provides the intern with beneficial learning;
•the intern's work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern and
•the intern and the employer understand that the internship is conducted without entitlement to a paid job at the end of the internship.
“Applying these considerations requires weighing and balancing all of the circumstances,” the court said. “No one factor is dispositive and every factor need not point in the same direction for the court to conclude that the intern is not an employee entitled to the minimum wage.”
This analysis illustrates how courts resolve pay-related disputes. The names and dialogue are fictitious.
To contact the reporter on this story: Michael Trimarchi in Washington at firstname.lastname@example.org.
To contact the editor responsible for this story: Howard Perlman at email@example.com.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)