Your first internship is an exciting experience full of firsts—your first time working in an office, first time wearing business clothes, first time reporting to a boss. But one first no one anticipates is your first lawsuit. For many interns, that is the reality. Employers frequently—and improperly—fail to pay their interns any wages at all, requiring interns to sue the first company for whom they worked.
Tommy Hilfiger USA, Inc. and Fendi North America, Inc. face a proposed class action lawsuit alleging that these entities misclassified interns as exempt from minimum wage and overtime requirements. The class of more than fifty (50) interns alleges that they should have been classified as entry-level employees because they were required to do the work of employees and did not receive any educational training typical of an internship. Melanie Zuccarini, one of the interns, claims to have worked more than forty (40) hours per week, guiding tours of the corporate office, organizing the inventory, and running errands without compensation. These tasks were critical to Tommy Hilfiger’s business and, had it not been for interns like herself, Tommy Hilfiger would have had to hire employees to do these jobs. Should the Court find in favor of the plaintiffs, both fashion giants are liable for violating federal and state wage and hour law.
Tommy Hilfiger and Fendi are just the latest fashion houses facing class actions. The crux of the problem is that employers, and particularly fashion houses, often misclassify entry-level employees as interns to avoid paying wages. Interns are workers. Under the Fair Labor Standards Act (“FLSA”), all covered and non-exempt workers must be paid a wage unless their internships meet the following requirements: (i) the internship is similar to training given in an educational environment; (ii) the internship experience is for the benefit of the intern; (iii) the intern does not displace regular employees; (iv) the employer derives no immediate advantage from the activities of the intern; (v) the intern is not entitled to a job at the conclusion of the internship; and (vi) the employer and the intern agree that the intern is not entitled to wages for the time spent in the internship. Interns in the “for-profit” private sector who qualify as employees must be paid at least the minimum wage. In other words, compensating interns with academic credit and “professional experience” rather than with wages may be illegal depending on the above-mentioned circumstances.
Being paid is not the only legal challenge interns face. Federal, state and city employment anti-discrimination statutes do not apply to unpaid interns. In a vanguard case, Bridget O’Connor, an unpaid intern, sued her psychiatric clinic and one of its doctors for sexual harassment. The court dismissed the case because O’Connor, as an unpaid intern, was not an employee under the law and, therefore, not covered by anti-discrimination statutes. Following this case, several jurisdictions, including the City and State of New York, passed laws specifically protecting unpaid interns from discrimination.
Internship programs are central to the college experience and necessary to gain entrance to numerous professions. Internships provide students with the opportunity to test various career paths, receive professional training, and offer employers a first look at the candidate pool for full-time positions. Internships are not going anywhere. Accordingly, there must be a legal relationship between interns and their employers that adequately protects interns from the lopsided power dynamic between employers and interns. Students are far less knowledgeable of employment rights than their employers, have little to no workplace experience, and are in an inferior bargaining position because supply of interns greatly exceeds available positions. Employers like Tommy Hilfiger exploit these young people, receiving free labor and preventing the creation of new paying jobs.
All workers deserve an equal pay for equal work whether classified as interns or employees, and students’ first encounter with the working world should be enriching, and more importantly, legal. If you are an intern and believe your employer illegally refused to pay you wages you deserve, please contact The Harman Firm, LLP.