Internships workplace experience, and build connections in the hope

Internships
have become an essential part of today’s collegiate and career-recruitment
experience. Many employers now expect potential employees to have internship
experience before hiring them and genuinely believe that internship experiences
are the most important factor when looking at possible workers. Internships
have been around for decades, providing college students with real life
experience before setting out into the real world. These opportunities to
“sample” out potential careers before actually graduating have proved to be
extremely beneficial for soon-to-be graduates. Many students and recent
graduates have turned to unpaid internships, hoping to shine their resumes,
gain meaningful workplace experience, and build connections in the hope of
landing a paying position. However, within the last five years, despite the
rise in popularity, unpaid internships have been widely debated about the
actual legality of them. Employers have much to lose if their unpaid internship positions unsuccessfully meet the
rigorous standards for exemption from federal minimum wage and overtime laws.

Due to
the recession in 2007–2008, the market for unpaid interns has grown considerably.
Since then, thousands of students spend their summers and semesters working for
no pay or compensation. Seeing internships as valuable learning experiences and
even prerequisites to paid jobs in their career fields students forego paid
jobs for unpaid positions with respected companies. Meanwhile, students from
less privileged backgrounds are forced to choose between taking on additional
loans and missing out on experiences that may be vital to secure their futures.
 These unpaid opportunities offer
organizations to save their money from not hiring employees and advertising
“real-world work experience” while still reaping the benefit of projects and
other odd jobs being completed by eager college students. Other benefits of internships include gaining
disciplinary skills, knowledge of professional practice, increased
self-awareness, and the expansion of social and professional networks.
Nevertheless, students are taking some risks by partaking in internships. Unpaid interns may not be protected by
federal workplace safety laws or states’ workers compensation laws. Federal courts
have also excluded unpaid interns
from coverage under Title VII of the Civil Rights Act of 1964, leaving interns
vulnerable to sexual harassment and discrimination based on race, religion, color,
sex, or national origin ( J. S. 2012, May 02).

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In May of 1937, President Franklin D. Roosevelt wrote to congress
to urge the creation of legislation to ensure that working Americans earn “a
fair day’s pay for a fair day’s work.” He argued that there was no excuse for
the failure of wages to meet the minimum standards of fairness and reasonableness
in a nation “so richly endowed with natural resources and with a capable
industrious population.” Thanks to President Franklin D. Roosevelt,
conversations started about what should be put in place in order to provide
protection for employees, the little guys that often got taken advantage of. The
Fair Labor Standards Act of 1938 (FLSA) set forth the federal minimum wage, and
other wage and hour provisions applicable to basically every working
environment in the United States. The FLSA defines “employee” as
“any individual employed by an employer.” It defines
“employ” as “to suffer or permit to work.” These
definitions contemplate that a person permitted to work for an employer is an
employee, whether the employer labels such person an “intern,”
“volunteer” or “trainee.” Incorrect classification of
employees as unpaid interns can be costly, resulting in back pay, liquidated
damages doubling the back pay amount, and attorneys’ fees (Venator, J., &
Reeves, R. V. 2016, July 28).

In
1981, according to a National Society of Experiential Education study, less
than three percent of college graduates had participated in an internship. In 1992, a Northwestern University study
found that 17 percent of graduating students had held unpaid internships. More recently, it was found that half
of graduating college students had participated in internships. Some say that approximately twenty-five
percent of internships are unpaid. Others say that half of internships are unpaid. In some fields like entertainment
and politics, nearly all internships
are unpaid. Around one-fifth of for-profit corporations with over 5,000
employees hire unpaid interns (Venator,
J., & Reeves, R. V. 2016, July 28). College students are told from the
second they enter college that in order to distinguish themselves for jobs,
their resumes must outshine their peers and competitors. How are they
encouraged to make this distinction? They need job experiences, internships,
paid, unpaid, or academic, it doesn’t matter as long as they can take away a
set of skills that will help them later in life. What are they suppose to do if
this opportunity results in them being exploited by their employer? Up until
five years ago, the response was to simply do nothing. However, thanks to Eric
Glatt and his decision to sue Fox Searchlight Pictures in 2012, that quickly
changed.

Eric
Glatt and Alexander Footman worked for Fox Searchlight Pictures as unpaid interns.
 From December 2009, through the end of
February 2010, Glatt interned in Black Swan’s accounting department under the
supervision of Theodore Au. He worked five days a week and around 40+ hours
each week. As an accounting intern, Glatt’s responsibilities included copying and
filing documents, tracking orders, transporting a variety of items to and from
the Black Swan set, and maintaining employee personnel files. Glatt came back a
second time in Black Swan’s post?production
department from March 2010 to August 2010, under the supervision of Jeff
Robinson. Glatt worked two days a week and roughly 18 hours total. His post?production responsibilities included drafting cover letters,
organizing closets/cabinets, making copies and filing documents, keeping the
take? out menus up?to?date and organized, bringing documents to the payroll
company, and running errands. From September 2009 to March 2010, Footman
interned in the production department under the supervision of Lindsay Feldman
and Jodi Arneson. Footman worked approximately ten?hour days. At first, Footman worked five days a week, but
after a few months, began working three days instead. Footman’s
responsibilities included picking up and setting up/breaking down office
furniture, coordinating rooms/housing for cast and crew, taking lunch orders, answering
phone calls, running errands, and internet research. A third intern, Eden
Antalik, was also an unpaid intern but for the publicity department. She was
originally participating in the internship to receive college credit. However, for
reasons unknown, she never was accredited for her internship. She worked every
day, starting at 8 A.M. and was often tasked with making travel arrangements, organizing
catering, shipping documents and setting up rooms for press events. On October
19, 2012, they filed a class action complaint in the Southern District of New
York against Fox for unpaid minimum wages and overtime for themselves and all
others similarly situated. Glatt and Footman ultimately decided to proceed
as individuals and moved for partial summary judgment, claiming they were
“employees” under the FLSA and the New York Labor Law (NYLL) (Gessner, J. 2015).

The
FLSA requires employers to pay all employees a specified minimum wage, and
overtime of time and one?half for hours worked in excess
of forty hours per week. NYLL requires the same, except that it specifies a
higher wage rate than the federal minimum. The Supreme Court has not cleared
the air on the differences between unpaid interns and paid employees under the
FLSA. However, in the ruling of Walling v. Portland Terminal Company of 1947,
the Court acknowledged that unpaid railroad brakemen trainees should not be
treated as employees, thus the minimum wage requirement of the FLSA did not
apply to them. The Court concluded several things with the ruling of Walling v.
Portland Terminal Co. First, the brakemen trainees did not displace any regular
employees and their work did not expedite the employer’s business. Secondly,
the brakemen- trainees did not expect to receive any compensation and would not
necessarily be hired at the end of the job. Third, the training course was
similar to that which would be given at a vocational school. And lastly, the
employers received no immediate advantage due to the work completed by the
trainees. The Wage and Hour Division (WHD) would go on to use the reasoning and
considerations from Portland Terminal to create guidelines for deciding when unpaid
interns are employees under the FLSA (Bergman, G. 2016, February 9). 

In 1967, the Department of Labor (DOL)
issued informal guidance on trainees as part of its Field Operations Handbook.
The guidance listed six criteria and stated that the trainee is not an employee
only if all of the criteria were met. More recently, the DOL issued similar
guidance for unpaid interns working in the for-profit private sector. In 2010,
the Intern Fact Sheet was published. This document provides that an employment
relationship does not occur if all six criteria are met. According to DOL.gov,
those six factors are:

1.    
The internship, even though it includes actual
operation of the facilities of the employer, is similar to training which would
be given in an educational environment;

2.    
The internship experience is for the benefit of
the intern;

3.    
The intern does not displace regular employees,
but works under close supervision of existing staff;

4.    
 The
employer that provides the training derives no immediate advantage from the
activities of the intern; and on occasion its operations may actually be
impeded;

5.    
The intern is not necessarily entitled to a job
at the conclusion of the internship; and

6.    
 The
employer and the intern understand that the intern is not entitled to wages for
the time spent in the internship.

If all the elements listed above
are met, an employment relationship does not exist under the Fair Labor
Standards Act, and the Act’s minimum wage and overtime provisions do not apply
to the intern.

The New York district court
evaluated Glatt’s and Footman’s employment using a variation of the above
Division of Labor six-factor test. Yet, the district court, unlike the DOL, did
not specifically require that all six criteria be present to establish that the
intern is not an employee and instead balanced the factors. The district court
found that the first four factors were in favor of finding that Glatt and
Footman were employees and the last two factors weighed in favor of them being
trainees. After much debate, the court rendered a decision. On June 11, 2013,
the district court concluded that Glatt and Footman had been improperly
classified as unpaid interns rather than employees and granted their partial
motion for summary judgment. They also granted Antalik’s motions to certify the
class of New York interns and to conditionally certify the nationwide FLSA
collective (Bergman, G. 2016, February 9).

Things began to change in July of
2015. The Second Circuit decided to adopt the primary benefits test and outlined
a guideline of related considerations to be looked at when determining if a
worker is an employee under the Fair Labor Standards Act. Thanks to the Glatt
v. Fox Searchlight Pictures case, the court decided to look more into what
factual circumstances must be present when employees are required to pay their
interns (Gessner, J. (2015). The plaintiffs argued to the court that there
should be an “immediate advantage” test, which finds interns to be employees
wherever the employer receives an immediate advantage from the work the intern
has completed. In the plaintiff’s opinion, the Supreme Court’s decision in Portland
Terminal rested on this determination. On the contrary, it was stated that for
a primary benefits test, which notes that when the interns receive any benefits,
tangible or intangible, from the employer that are greater than their
contributions to the employer’s operation, an employment relationship is not
created under the FLSA. The court started its opinion by conversing the Supreme
Court’s decision in Portland Terminal and the WHD factors, which the lower
court had relied on. The Second Circuit declined to use the WHD factors, noting
they were too rigid to be consistent with Second Circuit’s precedent. The court
explained that the WHD factors were developed from the specific facts in Portland
Terminal and were therefore difficult to apply in other circumstances (Greenberg,
R. 2015, August 11).

      Instead,
the court picked the primary benefits test as the acceptable form for deciding
whether or not there was employment status under the FLSA. This test has three
main structures that made it the appropriate tool for the Second Circuit. It emphases
on what interns get in return for their work, it gives the court the
flexibility to factor in the economic realities between the parties, and it
touches on the interns’ relationships with their employers. The court proceeded
to provide its own seven-factor list to help district courts in deciding the employment
status of interns under the FLSA, also referred to as the Glatt test. The seven
criteria listed include:

1. The extent to which the
intern and the employer clearly understand that there is no expectation of
compensation. Any promise of compensation, express or implied, suggests that
the intern is an employee–and vice versa.

2. The extent to which the internship
provides training that would be similar to that which would be given in an
educational environment, including the clinical and other hands-on training
provided by educational institutions.

3. The extent to which the internship
is tied to the intern’s formal education program by integrated coursework or
the receipt of academic credit.

4. The extent to which the internship
accommodates the intern’s academic commitments by corresponding to the academic
calendar.

5. The extent to which the internship’s
duration is limited to the period in which the internship provides the intern
with beneficial learning.

6. The extent to which the
intern’s work complements, rather than displaces, the work of paid employees
while providing significant educational benefits to the intern.

7. The extent to which the
intern and the employer understand that the internship is conducted without
entitlement to a paid job at the conclusion of the internship.   

These
factors require a balance and courts may need to focus on other relevant
factors, depending on the court case.  The
court also noted that its test reflects a central feature of today’s internship
programs: “the relationship between the internship and the intern’s formal
education.” The purpose of internships is to incorporate what students are
learning in the classroom with skill development in the real world. And this test
is better suited for evaluating today’s modern internship programs rather than
a sixty-eight-year-old Supreme Court test (Bergman, G. 2016, February 9).

However,
there are many doubts and disapprovals about the Glatt test. Courts in following
employment cases should not accept the Second Circuit’s Glatt test because it
expands the definition of “employee” under the FLSA. Furthermore, the
primary benefits test is too vague to instruct employers in creating internship
programs that comply with the FLSA in part, because the Second Circuit included
unnecessary factors further confusing the FLSA investigation. Further, the test
focuses more so on internships stemming from formal education programs to
benefit the many different types of internship programs that exist today. It
would be damaging for other circuits to adopt the Glatt test because the test
fails to enforce the purposes of the FLSA. The FLSA defined
“employee” in the broadest sense possible, and the Second Circuit
enlarges the narrow exception to that definition by changing the analysis from
whether individuals are working for their own benefit to analyzing who is
receiving a greater benefit. The Second Circuit has previously acknowledged
that the FLSA was intended to be remedial and should thus have the widest
possible impact on the economy in order to establish minimum standards in the
workplace, strengthen worker’s bargaining power, and eliminate unfair
competition amongst both employers and potential employees.  In Glatt, however, the Second Circuit chose to
deny FLSA coverage to a great number of people in United States working in unpaid
internships, who arguably need FLSA protections the most. 

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