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Four Ways You Can Seek Back Pay for an Unpaid Internship

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Posted on May 10, 2014

By Kara Brandeisky, ProPublica

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This piece originally ran on ProPublica.

At ProPublica, we’ve heard from a lot of unpaid interns. You’ve told us about walking your boss’s dog, fact-checking for magazines and even doing the same work as federal prosecutors — all for little or no pay.

If you think you might be entitled to minimum wage for your work, you have legal options. Here are a few resources you should know about.

Let’s start with the obvious — you can appeal to your employer directly for wages. If you go that route, know the U.S. Department of Labor’s rules. The Labor Department says if you are interning at a for-profit company, your employer needs to pay you at least minimum wage if any of these things are true:

Know the Labor Department’s guidelines.

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Are you interning for academic credit? That doesn’t necessarily make unpaid internships legal. The guidelines say if a college provides credit and oversight, an unpaid internship is more likely to be okay because it’s closer to an “educational environment.” But if you are, for example, “filing, performing other clerical work, or assisting customers” without pay, then the arrangement may be illegal, even if you are receiving credit, because that work provides an “immediate advantage” to your employer.

As a result, the Labor Department has cited intern employers with minimum wage violations even when the unpaid interns were receiving college credit. Check the Labor Department’s fact sheet (PDF) for a full explanation of its guidelines.

You can file a complaint with the Labor Department’s Wage and Hour Division.

If you file a complaint, the agency should investigate whether your internship violates the department’s six-part test. If an investigator decides in your favor, the Labor Department should tell your employer to pay you.

First, call 866-4US-WAGE. A Labor Department employee should evaluate your complaint and decide whether it’s worth investigating. Sometimes the agency warns employers in advance of an investigation; sometimes it doesn’t. The investigator may interview you, other employees, former employees and the managerial staff.

If it’s a “full investigation,” the investigator should also look for other labor law violations. For example, are all eligible employees paid overtime? Has the employer wrongfully misclassified any employees as exempt from certain benefits? Is the employer keeping proper records?

If the department decides your internship violates minimum wage law, the investigator should call a “final conference” with your employer. During that meeting, the investigator should explain why you should be paid (and explain any other labor law violations that need to be corrected). Then the investigator should ask your employer to agree to comply. Typically, the investigator will not tell your employer how much you’re owed in back wages until your employer agrees to pay you. If the employer has a history of labor law violations, or if the violations are “willful,” the agency may levy additional fines.

The Labor Department hasn’t investigated many unpaid internships because it’s waiting for interns to file complaints — something they are generally reluctant to do. But when the agency does investigate, it often finds that interns should have been paid minimum wage.

The upside of filing a complaint: They are confidential. The Labor Department shouldn’t tell your boss you filed a complaint or whether a complaint even exists.

The downside: Technically, even if the Labor Department decides you are owed back wages, the agency can’t force your employer to pay you. Your employer could refuse to comply. ProPublica found at least one case where the Labor Department declined to sue a company after it refused to pay back wages to its former interns. If the department doesn’t step in, interns can try to win back wages by filing a lawsuit on their own.

ProPublica obtained case files for 16 Labor Department investigations into internships in sports management, journalism and physical therapy, among other industries. Use our site to see if the department has already investigated an internship like yours and whether investigators found wage violations.

You can file a claim with your state labor agency.

Many states have their own labor offices that can help resolve wage disputes. State wage and hour laws usually mirror the federal Fair Labor Standards Act, but some states offer additional worker protections. Other states — like Alabama, Florida and Georgia — don’t have their own wage and hour divisions, in which case you’ll need to call the federal Labor Department.

Some state labor agencies have already taken action against employers of unpaid interns. For instance, Oregon’s labor regulatory agency won $3,350 in back pay for unpaid interns at a solar panel company and $2,188 in back pay for an unpaid intern with the Portland Timbers soccer team. In California, the labor commissioner ordered the University of California, San Francisco to pay more than $14,000 in back wages, damages and interest to an under-paid psychology intern.

New York has also taken a stronger stance against internships at nonprofits. Federal rules say unpaid internships in government agencies or nonprofits are “generally permissible,” but New York (PDF) says nonprofits still must pay their interns except under limited circumstances. Namely, certain nonprofits may have unpaid interns enrolled in educational programs, as trainees receiving formal instruction, or as volunteers who do completely different tasks than paid employees. The state has an even stricter 11-part test (PDF) for internships at for-profit companies.

The New York Department of Labor doesn’t track how many unpaid internships it has investigated, but a spokesman said any employees who have been denied compensation can call 1-888-4NYSDOL to file a complaint.

The takeaway: Depending on where you live, your state might have more experience handling unpaid intern complaints than your regional Labor Department office.

You can file a lawsuit.

If all else fails, you can sue for back wages on your own under the Fair Labor Standards Act or your state’s minimum wage law. So far, ProPublica has identified 35 lawsuits filed by interns seeking back wages; 14 of them were settled or voluntarily dismissed.

But if your employer refuses to settle, it’s hard to know what will happen. The courts have not issued many rulings on unpaid internships.

Ultimately, courts may adopt a much weaker standard than the current federal guidelines. The Labor Department says if an internship fails just one or two prongs of the six-part test, an employer can be liable for back wages. But some courts have instead applied a “primary beneficiary” test, which says if an unpaid intern benefits from the arrangement more than the employer, it can be considered legal regardless of the Labor Department’s six-part test. It’s harder for unpaid interns to win under that standard.

If you decide to fight, a lawsuit could take time. Eric Glatt won a ruling for back wages nearly two years after filing a class-action lawsuit against Fox Searchlight Pictures. But the case is now headed to the 2nd U.S. Circuit Court of Appeals.

Glatt said he didn’t file suit just for the money. He said he wants to bring attention to the unpaid intern economy — but recognizes many interns won’t necessarily feel the same way.

“I don’t believe anyone has any obligation to draw more attention to this than they want.” Glatt said. “I was afraid with the Labor Department, filing a claim for minimum wage, even if I was successful, they would have forgotten about it before the ink was even dry on the check…and everything would go back to business as usual.”

For more, read our story about the Labor Department’s enforcement efforts, browse the agency’s internship investigation reports, and track the latest lawsuits. Did you work an unpaid internship? Share your story with us.


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