Internships offer students the opportunity for hands on supervised learning experiences in their particular field of study. But, must companies pay their interns? This question has been the subject of fierce litigation for several years and a matter considered by New York’s federal appellate court. On February 5, 2019, the Second Circuit Court of Appeals considered yet another case concerning unpaid interns. Today’s Long Island employment law blog discusses the case, Velarde v. GW GJ, Inc.
Generally, federal and state labor laws, such as the Fair Labor Standards Act or FLSA, and the New York State Labor Law or NYLL, require that all employees receive, at least, the minimum wage for the hours they perform work for their employer. So, if interns are considered employees, then companies must pay their interns. But, are interns employees entitled to minimum wage or other pay?
In 2015, the Second Circuit faced, for the first time, the question of whether a company must pay temporary interns. The case, known as Glatt v. Fox Searchlight Pictures, set forth a primary beneficiary test. In its simplest form, the test seeks to determine who is the primary beneficiary of the internship. For instance, if the internship genuinely provides the intern with a learning experience or other opportunity which benefits the intern more than the company, then the intern is not owed wages. If, on the other hand, the company receives the primary benefit, then the intern is considered an employee and must receive wages.