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Labor Department Intervenes on Behalf of Hearst Interns

The federal agency asks the Second Circuit to crack down on employers that refuse to pay interns.

For the first time, the U.S. Labor Department has gotten involved in a high-profile lawsuit brought by unpaid interns. On Friday, the federal agency filed an amicus brief in support of eight former interns suing Hearst Corporation for back wages.

In the brief, the department urges the 2nd U.S. Circuit Court of Appeals to adopt a narrower interpretation of the federal standard governing when for-profit employers may legally hire unpaid interns. The Labor Department expresses particular concern that the sluggish economy has made "the promise of free labor...both tempting and available," allowing unpaid internships to proliferate.

"The department seeks to file amicus briefs when doing so can promote the department's interests (worker protection) and further its activities, such as enforcement of, in this case, wage and hour laws," a Labor Department spokesman wrote in an email to ProPublica.

The former Hearst interns, led by Xuedan Wang, allege that they worked without pay for various Hearst magazines with little supervision or training. Wang said she worked between 40 and 55 hours a week for Harper's Bazaar, coordinating deliveries of accessories samples, doing clerical work such as expense reports and managing other unpaid interns.

Hearst Corporation responded to the lawsuit by saying its internships are "designed to enhance the educational experience of students... and are otherwise fully in compliance with applicable laws."

Last spring, the Hearst interns were denied class-action status.

As the federal agency responsible for enforcing minimum wage law, the Labor Department has developed a six-part test that explains when for-profit employers must pay their interns. The test is derived from a 1947 Supreme Court decision, Walling v. Portland Terminal, in which the court decided that under a limited set of circumstances, employers do not need to pay trainees.

According to the department's rules, unpaid interns can't displace regular employees or do work that provides an "immediate advantage" to the business. The interns also must understand they're not entitled to jobs or wages, and the internship must be of educational benefit to the interns.

The agency takes an "all-or-nothing" approach — if an employer violates just one part of its six-part test, interns may be entitled to the minimum wage. But many courts have adopted a "primary beneficiary" or "totality of circumstances" test, which says that if the unpaid intern benefits from the internship more than the employer, the employer doesn't need to pay, whether or not the internship fulfills the government's six-part test.

In its amicus brief, the Labor Department asks the Second Circuit to reject the broader interpretation and adopt the agency's all-or-nothing standard, arguing that it is more objective and better protects interns from exploitation.

"Given the rapid expansion of unpaid internships across various sectors of the economy and the varied nature of those internships, it is important for the uniform enforcement of the [Fair Labor Standards Act] to have an objective test to measure interns' employment status," the brief says.

The Hearst case is one of at least 20 lawsuits filed by former interns in the past several years. Unpaid interns who worked on the movie "Black Swan" scored the first real victory last summer, when a federal judge ruled Fox Searchlight Pictures had violated minimum wage laws by not paying them. Fox Searchlight Pictures has also appealed that case to the Second Circuit.

Last week, another high-profile case came to a close when Condé Nast announced it was settling a lawsuit brought by two unpaid interns. Other legal challenges, like those filed against Sony Corporation and Madison Square Garden, remain in progress.

Read the full amicus brief, or explore the price of college internship programs at different schools across the United States.

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