Internships can benefit employee and employer

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Some unpaid interns are exploited as free labor by large and small businesses, and that’s wrong. But other interns — perhaps the majority — work for no pay (or meager pay) to gain valuable on-the-job training, experience and, often, credits for high school or college.

Interns and employers can both benefit from the relationship.

But in the wake of a ruling by a federal judge in New York, unpaid internships could go away, making it even tougher for young men and women to get a real-life taste of their chosen profession.

Judge William Pauley III of the U.S. District Court for the Southern District of New York ruled last week that Fox Searchlight’s use of interns in producing the movies “Black Swan” and “(500) Days of Summer” violated minimum-wage and overtime laws. Pauley concluded the interns served the same functions as paid employees and required no special training.

While the employer got the benefit of their work, the judge wrote, the interns “received nothing approximating the education they would receive in an academic setting or vocational school.”

Pauley based his ruling on six criteria — from gaining education and experience to making sure the intern doesn’t replace paid workers and works under close supervision.

In theory, Pauley’s ruling has merit. Interns should not be a code name for exploited worker. Interns who are doing a job rather than training for a career should be paid.

But the checklist doesn’t always tell the whole story. It can too easily be twisted.

Pauley’s ruling, which should be aimed at the unscrupulous purposely taking advantage of interns, might have a chilling effect on all internship programs. Employers will be wary of being sued for providing temporary on-the-job training.

The big losers will be those seeking to get a start in the real world. The opportunity to gain valuable experience (as well as contacts) could be severely limited or eliminated.

This ruling could prove to be very shortsighted.

Some employment attorneys believe the ruling is a mistake because it’s so narrow.

“You’ve got to consider a lot of different factors, including these six factors,” said Camille Olson, a partner at Seyfarth Shaw who frequently defends companies in wage-and-hour cases.

In a previous intern case, Xuedan Wang v. the Hearst Corporation, Judge Harold Baer Jr. (of the same New York court) said it is important to consider the “totality of circumstances.”

Exactly. A one-size-fits-all ruling benefits nobody.

The specific case ruled on by Pauley now goes back to trial. We have not heard the last word on this issue.

It is hoped that, as this case and others go through the legal system, all aspects of internships can be considered.

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