A federal court in New York has found that Fox Searchlight Pictures unlawfully failed to pay interns who worked on the movie Black Swan. Under federal and New York law, an employer may not refuse to pay interns who work as employees. The court applied six criteria set forth by the U.S. Department of Labor to determine whether, considering the “totality of the circumstances,” the interns were actually employees. Those criteria are as follows:
1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
The court held that the interns “worked as paid employees work, providing an immediate advantage to their employer and performing low-level tasks not requiring specialized training.” With the exception of the sixth factor, all of the criteria above weighed in favor of finding that Fox should have paid the interns as employees. Even though the interns understood that Fox would not pay them for their work, the court held that Fox still should have paid them as employees. The reason for this rule is that if employees could simply voluntarily waive their right to a lawful minimum wage, employers with superior bargaining power could force employees to waive their right to a minimum wage and depress wages throughout an entire industry–which would totally defeat the public policy of a minimum wage.