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Are unpaid internships legal in Houston?

Many Houston businesses may have interns on their staffs. Interns are often either new to the workforce or new to the particular field, and as such they bring a great amount of energy and willingness to gain work experience. This mindset is especially helpful for those interns who are in unpaid programs--where they work essentially for free.

Many internship programs are able to skirt federal minimum wage laws if they meet certain criteria set forth by the federal government. However, many businesses may be taking advantage of interns by keeping them off the payroll. Several lawsuits have sprung up recently that suggest employers are wrongly denying interns pay.

According to the Fair Labor Standards Act, internship programs must meet the following six qualifications in order to be exempt from wage laws:

  1. The internship must be designed to benefit the intern.
  2. The employer may not receive immediate benefits from interns; to the contrary, at times the employer may be hindered.
  3. The internship must offer training similar to that which would be provided in a traditional educational setting.
  4. The intern must not take the place of any regular employee and must work under supervision.
  5. The intern and the employer must understand from the beginning that the intern will not be paid.
  6. The intern must understand that he or she is not entitled to receive a paid job upon completion of the internship.

One internship program lawsuit that is gaining notoriety is that which was filed against Fox Searchlight last fall. Two interns who worked on the film "Black Swan" filed the suit, claiming the program violated the FLSA. They have now asked a judge to allow them to amend the class action to allow it to cover all of the interns who have participated in Fox Entertainment Group's internship programs rather than only those at Searchlight.

Interestingly, Fox Entertainment Group changed its internship policy in July 2010 and began paying all interns $8 an hour.

Source: The Hollywood Reporter, "Fox's Entire Internship Program Now Under Legal Attack," Eriq Gardner, Aug. 13, 2012

Source: Department of Labor, "Internship Programs Under the Fair Labor Standards Act," April 2010

  • Our Houston law firm handles employment and wage disputes. To learn more about our practice, take a look at our Houston Overtime Pay Dispute page.

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