Are Interns Employees? The Fight in the Second Circuit

The application of many federal, state and local anti-discrimination laws is limited to the employer/employee relationship. This makes distinguishing between employees and those with similar but distinct relationships — like independent contractors — all the more important. With the increased prevalence of both paid and unpaid internships in a challenging job market, whether interns qualify for protection under various employment laws is now a more important question than over.

The question is so challenging, in fact, that two federal judges in New York City have recently come to opposite conclusions on the very same issue in relation to the minimum wage provisions of the Fair Labor Standards Act. In early June an NYC federal judge ruled as a matter of law that unpaid interns were employees in a suit against Fox Searchlight. Later that same month, a second federal judge in the same district ruled in a suit against the Hearst Corporation that the question was too fact-intensive to be decided without a trial.

While these suits relate to wage and hour claims under the Fair Labor Standards Act, they could have indirect implications for our core practice in employment discrimination:

• In the context of these types of cases, the EEOC has previously taken the position that federal employee discrimination laws only apply to interns that receive “significant remuneration” for their efforts. This means that even unpaid interns can be considered employees for the purposes of these acts if they receive significant benefits from the relationship.

• In the case of paid interns, the analysis is similar to that used when distinguishing between employees and independent contractors, who are also not covered under federal, state and New York City employment laws.