HR Management & Compliance

School for Scandal: Hearst Corp. Latest Company to Be Sued by an Unpaid Intern

By Liza Casabona

Thinking that an unpaid intern might provide an answer to payroll your budget woes? Think again. Several recent, high profile lawsuits filed by interns underscore the risks faced by companies sponsoring unpaid internships.

The Hearst Corp. is among the latest companies to be accused by interns of wage and hour violations. The company was slapped with a lawsuit Feb 1. by by a former intern alleging violations of the Fair Labor Standards Act and New York Labor Law while she was interning with Harper’s Bazaar, a Hearst Publication.

Xuedan Wang of Brooklyn, N.Y., the suit’s named plaintiff, often worked more than 40 hours per week, and sometimes as many as 55 hours per week without being paid, according to the suit.

“Unpaid interns are becoming the modern-day equivalent of entry-level employees, except that employers are not paying them for the many hours they work. The practice of classifying employees as ‘interns’ to avoid paying wages runs afoul of federal and state wage and hour laws,” said attorney Adam Klein of Outten & Golden, the firm representing Wang.

Hearst declined to comment on the allegations. At presstime, a company official said he had not yet seen the court filings.

Hearst specifies on its employment website that its interns must get college or university credit for their internship and must be currently enrolled with an accredited college or university. Interns enter into the relationship knowing they will not be paid.

Read more about  Hearst’s intern requirements here.

Navigating the federal rules governing unpaid internships can be dicey. Fox Searchlight was hit with a wage and hour lawsuit in September filed by two  unpaid interns who had worked on the film “Black Swan.”

There are limited instances when a for-profit company may offer an unpaid internships, according to the Labor Department’s Fact Sheet #71:

“In general, the more an internship program is structured around a classroom or academic experience as opposed to the employer’s actual operations, the more likely the internship will be viewed as an extension of the individual’s educational experience (this often occurs where a college or university exercises oversight over the internship program and provides educational credit).  …  On the other hand, if the interns are engaged in the operations of the employer or are performing productive work (for example, filing, performing other clerical work, or assisting customers), then the fact that they may be receiving some benefits in the form of a new skill or improved work habits will not exclude them from the FLSA’s minimum wage and overtime requirements because the employer benefits from the interns’ work.”

Subscribers to Thompson’s FLSA compliance pubs can read more about internship pitfalls and best practices in upcoming issues this spring.