OFF BEAT: Employers abandon unpaid internship programs in light of lawsuits

Employers may be abandoning unpaid internships—or perhaps considering the option of compensating interns who previously toiled for free in return for practical work experience.

Two recent lawsuits claiming interns should have been paid, along with U.S. Department of Labor guidance, may be behind the trend, according to a report.

In April 2010, DOL’s Wage and Hour Division released a fact sheet titled “Internship Programs Under The Fair Labor Standards Act,” which provided employers with information to help determine whether interns must be paid a minimum wage and overtime.

To avoid paying interns, for example, internship programs must benefit the intern, not the employer. They also must provide training, and interns must work under staff supervision and not displace regular employees.

Reports say that, during the recession, employers helped balance their budgets by staffing up with unpaid interns.

But in a recent high-profile lawsuit, an unpaid intern for Harper’s Bazaar sued the magazine’s parent company, Hearst Corp., for allegedly violating such requirements. The intern claims she carried out menial tasks, such as transporting fashion samples.

In a similar lawsuit, two interns who worked on the movie “Black Swan” are suing Fox Searchlight Pictures. They claim they handled menial paperwork that did not provide them any educational training.

One concern is that employers may overreact by eliminating legitimate programs that provide opportunities for students.