Everyone has felt the effects of the recent economic recession. Companies saw a fall in profits, which they responded to by cutting back on expenses (including employees), which in turn led to people spending less money, especially on luxury items. One of the ways companies chose to cut back on expenses was by hiring more unpaid interns instead of paid employees.
Those who were on the job hunt saw a dramatic decrease in the number of jobs and a substantial increase in the number of unpaid internships available. Internships have long been seen as a foot in the door to a paid position, particularly for those just starting out in a certain profession. With the tough economic downturn, followed by a jobless recovery, many people took what they could get in hopes it would lead to something better later on down the line.
Internships provide a chance for new professionals to gain some valuable hands-on experience in the field they wish to pursue. However, there currently are no labor laws to regulate internships and this has created problems. Several employers have recently had to face class action lawsuit alleging unpaid interns performed the same duties as employees, and as such, should have been paid for their work.
The federal Department of Labor has stated that unpaid interns must learn key tasks and do so without producing revenue for the company. However, the Department of Labor is not a governing body. It can provide guidelines for courts and legislators to use, but it does not write any laws and it has no power to enforce any of its own decisions.
The Department of Labor’s position on the requirements for an unpaid intern was used in a recent class action lawsuit against Condé Nast, in which the class of interns alleged they should have been classified as paid employees. The two parties agreed on a settlement, and the judge granted preliminary certification of the settlement, but he has been careful to specify that his ruling applies only to this case.
Normally, when a court makes a ruling in a lawsuit, other courts use that ruling as a reference when dealing with similar cases. Such a guide would certainly be helpful right now, because various businesses across the country have experienced numerous lawsuits in which unpaid interns have claimed they performed the same work as paid employees.
The lawsuit against Condé Nast has settled for $5.85 million and will be distributed among “all individuals who had an internship in New York State at Condé Nast between June 13, 2007 and the date of this Order” for violations of state law. Another class of plaintiffs alleging violations of the federal Fair Labor Standards Act (FLSA) includes those who had an unpaid internship beginning in June 13, 2010. Each class member is expected to receive anywhere from $700 to $1,900, depending on how many hours they worked for Condé Nast.
Judge Henry Pitman, who issued the preliminary approval of the settlement, noted that, “Given the unsettled state of the law applicable to this case and the risks inherent in this action, a recovery rate of 60% is well above the lowest point of the range of reasonableness.”
The Illinois overtime attorneys and Chicago FLSA attorneys at the Chicago Overtime Law Center are investigating unpaid overtime claims against Newspapers, Magazines, Media Companies, Hotels, Restaurants, Retail Stores and Chains, Banks and real-estate companies for misclassifying appraisers or loan officers as managers, erasing or altering time sheets or time records, pressuring workers not to report or record overtime, and otherwise failing to pay workers for overtime and other wages. If you are the victim this practice call us at (312) 869-4095 or contact us online.
The Chicago unpaid overtime lawyers at the Chicago Overtime Law Center have decades of experience fighting for wage earner’s rights. We have a team of Chicago unpaid overtime attorneys who focus on nationwide class action lawsuits and work out of Chicago and Oak Brook offices and prosecute claims for workers all over the Chicago area including Schaumburg and Lincolnwood. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, McHenry Kane and Cook Counties.