Education Update, No. 2 - April 2013: Is There An Intern In Your Future?

by Fisher Phillips

There was a significant increase in the number of class-action lawsuits in 2012 brought by former interns, many of whom were in unpaid positions working in the business sector.  But recently the educational community received a wake-up call when Hamilton College was hit with a class-action lawsuit involving its paid interns.

The Facts

In the Hamilton College case, former employee Benjamin Kozik, representing a class of over 40 former interns of the athletic department, claimed that his role as an intern as Intercollegiate/Assistant Football Coach did not qualify as exempt internship (for which minimum wage and overtime requirements did not apply);  that he was not an exempt educational employee;  and that the stipend he received each month was not enough to properly compensate him for all the regular and overtime hours he worked. 

As a result, Kozik is seeking unpaid overtime wages of up to 40 hours per week, liquidated (double) damages, interest, and attorneys’ fees. Kozik is also asking the court to award similar amounts for each of the other members of the intern class.  While no total damage figure is provided, these claims could easily reach over $5,000,000.  This figure does not include the possible award of attorneys’ fees and other litigation costs which could add another $1,000,000 to the total.

The Hamilton College case serves as a stark reminder that internship programs – even paid ones – come with risk and should be carefully constructed and periodically reviewed to ensure that they do not run afoul of state and federal wage and hour laws.  As we reflect on the new scrutiny of internship programs, several critical lessons arise.

Lesson #1: Many “Interns” Must Be Paid Minimum Wage And Overtime Pay

In most cases, workers are entitled to be paid at least minimum wage for all hours they work,  and overtime pay for those hours above 40 in a workweek.  Unfortunately, there is not a simple and easy-to-apply test to determine when this rule may be ignored and the internship treated as an unpaid position. In broad terms, to qualify as a legitimate unpaid (or minimally paid) internship program, its purpose must be educational.  The program must provide learning, instruction and training that imparts broad, significant, substantive, and transferrable knowledge. In addition, the program must create an experience that is consistent with these purposes.

What this means in practical terms is that, if an intern is asked to perform routine or productive work that directly benefits the organization or that would otherwise have been performed by an employee, it will not qualify as a legitimate unpaid internship.  As a result, if an intern is asked to assist the soccer coach with training drills (productive work), help clean up the school after an event (routine work), or travel with students to school events or games (productive work), the viability of the internship program could be placed at risk and, as a result, all time worked by the intern could be subject to minimum wage and overtime requirements.

Lesson #2: Mistakes Are Costly

Pay mistakes are expensive in even the most limited situations.  The cost of these mistakes quickly compounds, however, when legal requirements are misunderstood or where an internship program is structured properly but administered in a manner that does not comply with wage-hour rules. 

In these situations, a former intern may be able to assemble a group of other interns who had a similar experience and, with the assistance of counsel, create a class action claim based on similar allegations, harm, and damages.  The risk to schools is increased because of the high cost of litigating these matters in addition to the increased risk that claims can become more believable if multiple people are telling similar stories.

Lesson #3: Records Are Critical – Especially If Something Goes Wrong

If your internship program is challenged, having key records will be important in responding to a claim and putting together your defense.  For example, a memorandum of understanding (MOU) that is presented to and signed by the intern can be a compelling piece of evidence if it confirms facts that make an internship program legitimate, such as:

  • the unpaid nature of the internship or the limited pay provided;
  • that a position is not guaranteed after completing the internship;
  • the educational purpose of the internship and the intent to benefit the intern (and not the school);
  • the limited scope of activities that will be performed by the intern; and
  • the intern’s obligation to promptly report any assignment of duties or activities that are outside the identified scope.

 In addition, time records may also become critical should interns be successful in arguing that they were not part of a qualified internship program and were instead entitled to at least minimum wage and overtime.

Without such records, interns will be permitted to estimate the hours worked. If your school disagrees with the estimate, it must do more than dispute the claimed hours – it must prove the inaccuracy. This is because the employer, not the intern, is required to maintain time records.  When accurate time records are not created and maintained, the employer is ultimately responsible.

Lesson #4: Follow Best Practices In Deploying Your Internship Program

If you have made it this far and still plan to adopt or continue an internship program, it may be helpful to review the following best practices and identify those that target your area of vulnerability and may assist in reducing your risk of liability:

Consider an Audit

If you have an existing internship program, an audit can be a helpful tool in determining if you have an appropriate educational purpose for the internship and if the activities the intern performs will benefit the intern rather than the school.  In addition, the audit can help confirm that the activities of the intern are not the same as the duties that are or would be performed by another employee. 

Train Supervisors Who Work With Interns

Even the best program can be derailed by a supervisor who does not understand the importance of selectively assigning experiences and activities to interns.  Training can help supervisors utilize interns appropriately and prevent expansion of responsibilities into areas that may disqualify your program.

Seek Another Solution If Necessary

If you discover that your program cannot be brought into compliance, consider discontinuing it or converting it to a paid program that complies with wage and hour requirements.

Document Key Aspects Of Your Internship Program

This is your chance to create self-serving documentation about your program, its purpose, and the narrow scope of intern activities that are authorized.  You may also want to include references to the training provided to those supervising the intern and the care taken to ensure the program is in compliance.

Secure Signed MOUs or Internship Agreements

As noted above, an MOU can be a powerful tool to clarify intent and secure agreement to report activities that are inconsistent with the educational purpose of the internship program. An intern’s failure to timely report deviation from the agreed activities can help a school refute an allegation that it intentionally created a noncompliant program or allowed supervisors to misuse interns.

Create Checklists

Interns can also assist with the documentation process by keeping a checklist of agreed activities they are involved with during the course of the internship as well as confirming what they learned as a result.

To Sum It Up

Internship programs, whether paid or unpaid, create risks for schools if they are used as a substitute for low-cost or no-cost workers. Schools that take the time to plan and construct internship programs that are focused on the intern and provide them with an enriching educational experience have far less risk of challenge down the road. 

Hopefully the lessons arising out of the Hamilton College dispute will help you navigate the initial decisions and create a program that is designed to minimize liability and create the best educational experience for your interns.

For more information contact the author at or (503) 242-4262.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Fisher Phillips | Attorney Advertising

Written by:

Fisher Phillips

Fisher Phillips on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.