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Everyone Calm Down a Little: Most Companies Already Pay Their Interns

Written by Michael Arnold

Last month Condé Nast decided to end its storied internship program. The termination came on the heels of a multi-million dollar lawsuit filed by two former interns alleging that Condé Nast failed to pay them at least the minimum wage and overtime. That lawsuit, along with similar lawsuits against others in the publishing and entertainment industries, appeared to open a floodgate of intern class action litigation across New York City (and elsewhere). The fear for many students (HS, undergrad and graduate alike) craving a coveted spot in some of the nation’s top companies or merely just trying to get their foot in the door in this troubled economy was that other employers would follow Condé Nast’s lead and end their programs. But a recent Intern Survey conducted by the Society for Human Resource Management shows that these fears are mostly unfounded.

According to the Survey, not only has the number of internships offered increased over the last five years (a 34% increase from 2012 to 2013 alone), but, more importantly, the number of employers paying their interns has increased as well. (Many) employers are starting to understand that you can’t pay someone nothing for providing the same services that your regular employees provide you. (Many) employers are either paying their interns or, if not, they have structured their programs such that the intern will truly qualify as a “trainee” under Department of Labor’s rigorous exemption test. But the latter seem to be in the minority, as more than three-quarters of those surveyed reported that they pay their interns, and do so at a rate that exceeds the minimum wage.

Two words of caution from the Survey however: first, approximately one-third of employers surveyed do not have an HR function that provides guidelines to the staff regarding what types of work interns can and cannot perform. This is particularly problematic for companies who do not pay their interns. Second, SHRM surveyed a limited set of employers – each of which was a member in SHRM’s organization and it did so before the onslaught of intern class action lawsuits. Therefore it may have surveyed a more compliance-friendly audience unaware of their potential exposure on this issue. I suspect that survey of non-SHRM members conducted next year would reveal a higher rate of payment-free programs and/or a lower rate of employers offering programs. In any event, if you haven’t done so already, we strongly recommend that you audit your internship program to avoid exposure to a costly wage and hour class action lawsuit.

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