Intern or Employee For Your Organization

Court Holding: The court granted summary judgment to the employer-defendant concluding that under the eight-factor primary beneficiary test, the plaintiff was an intern – not an employee and, as such, was not entitled to wages pursuant to Fair Labor Standards Act (“FLSA”).

Employment Counsel: An internship can be unpaid when the vocational and educational benefits received by the intern outweigh the benefits received by the employer for the intern’s work. Thus, if the intern spends most of his/her time performing professionally relevant work, even if the employer also benefits from such work, the intern does not need to be paid. However, if the intern is performing menial services that do not provide true vocational training (for example, getting coffee, running errands, photocopying, data entry), it is likely the intern needs to be paid wages to comply with FLSA.

Prior to commencing any internship, the organization and intern should define the relationship – both for the benefit of the intern and the organization. Further, during the internship, the organization must be diligent to ensure that the intern is actually performing professionally relevant work and receiving benefit from the internship (beyond resume building).

Case Summary: The defendant, Gawker, was a media company that employed unpaid interns. Plaintiff, Aulistar Mark, was one of Gawker’s unpaid interns who argued that he was a Gawker employee under the Fair Labor Standards Act (“FLSA”) and entitled to minimum wage for his work.

In determining that Mark was properly classified as an intern instead of an employee, the court employed an eight factor “primary beneficiary” test under which an unpaid internship is considered legitimate if the educational benefits the intern receives from the internship outweigh his contribution to the employer.

Eight factors to help a court determine who is the primary beneficiary of the internship, with their application to this case, are as follows:

The understanding between employer and intern that there is no expectation of compensation: Mark had no expectation of compensation for the internship.

Does the internship provide training that is similar to the clinical and other hands-on training that would be provided in an educational environment? Mark received educational benefits in the form of opportunities to learn journalism skills that Gawker employees were expected to already know.

Does the internship count for academic credit? Yes, Mark earned academic credit.

Does the internship accommodate the intern’s academic commitments by corresponding to the academic calendar? Gawker accommodated Mark’s academic commitments.

Was the length of the internship sufficiently limited to the time it took to learn new skills? Mark’s internship only lasted 3 months and he was provided with beneficial learning experiences for the entire duration of his internship.

Does the intern’s work complement, rather than displace, the work of paid employees? The majority of Mark’s work was complementary.

Is there an understanding that there will be a paid position for the intern at the conclusion of the internship? There was no expectation of a paid position following Mark’s internship.

Was the intern the primary beneficiary under the totality of the circumstances? Under a totality of circumstances, Mark was properly classified as an unpaid intern because he received significant vocational benefits. Mentors edited his work, helped him publish a piece for his portfolio, and he received academic credit for his internship.