Internships: to pay or not to pay?

Tue Aug 18, 2015 1:13pm EDT
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By Patricia Reaney

NEW YORK (Reuters) - For young people trying to get a foot on the career ladder, internships offer valuable experience.

But lawsuits are mounting that claim the often unpaid positions violate U.S. labor laws, prompting experts to call for changes.

Actresses and fashion designers Mary-Kate and Ashley Olsen were the latest high-profile employers to be hit with a lawsuit when a former intern at their company filed a case last week.

Shahista Lalani claims she worked 50 hours a week for Dualstar Entertainment Group and was not paid. The company has said the allegations are groundless.

Similar cases have been filed by disgruntled interns since 2011, when Eric Glatt and Alexander Footman launched their lawsuit against Fox Searchlight Pictures claiming it had violated minimum wage laws.

In March, media and entertainment company Viacom Inc agreed to pay $7.2 million to end a class action lawsuit by former interns.

The U.S. Department of Labor has issued rules for private-sector companies to meet when offering unpaid internships. It stipulates the work must be educational, beneficial and supervised and that the employer derives no advantage from it.

But Diana Furchtgott-Roth, an author and former chief economist at the U.S. Department of Labor, said the rules are unfair and need to be changed.   Continued...