off-stage right

One of the most worrisome topics I saw of the Twitter stream of the TCG conference was regarding the Department of Labor and internships.  This hasn’t seemed to pick up much commentary, perhaps because it is difficult to understand or perhaps there are so many other issues this one fell to the wayside.  There seemed to be some significant concern that the Department of Labor was “cracking down” on internships.

The Fair Labor Standards Act (FLSA) governs minimum wage and who qualifies. Of course the first question is does a particular organization fall under the governance of the FLSA.  A quick read left me with the impression that most theaters would.  So then what are the implications regarding interns.   In the article, The Cost Of Unpaid Interns, How to navigate the wage and hour law maze – the NonProfit Times explains the following guidelines:

In Walling v. Portland Terminal Co., 330 U.S. 148 (1947), the individuals at issue participated in a training program that was a prerequisite to employment. The Supreme Court held that employment “trainees” were not employees for purposes of the FLSA during their training period. The Court considered the “economic reality” of their training as well as the circumstances surrounding the training, and concluded that the training program did not contemplate compensation, nor did the employer derive any immediate or direct advantage from the trainees’ work.

Following Walling, the U.S. Department of Labor issued a six-part test to help determine whether an individual is a “trainee,” as opposed to an employee requiring compensation. If all of the following criteria apply, the trainees are not employees within the meaning of the FLSA and need not be paid:

1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
2. The training is for the benefit of the trainees;
3. The trainees do no displace regular employees, but work under their close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees and, on occasion, the employer’s operations might actually be impeded;
5. The trainees are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees understand that the trainees are not entitled to wages for the time training. (Note that as an exception to this criterion, tuition assistance and nominal stipends for students are not considered wages.

Some Google research finds contradictory information as to whether you must meet all 6 criteria and the interpretation of the criteria themselves (not surprising).  Other questions revolve around what is compensation (does housing count – general research seems to say yes it does), what about stipends (seem to be okay for tools, books or other education materials – not food and gas as most of us think of them), and what risk are nonprofits really facing in this supposed “crack-down” versus say law firms, financial services, and other for-profit companies.

Here are just a few my concerns (and opinion, standard disclaimer – I am not offering advice or any legal consultation in what ANY organization of individual should do):

1.  Most arts organizations probably meet numbers 1, 2, 5, and 6 with some ease. However most arts organizations I know need interns to balance out the workload and the affordable workforce (which we be in conflict with the guidelines.

2. Number 3 may seem more subjective in the organizations eyes than an outside evaluator.  For example in theatre many interns work backstage crew assignments.  We may not think of this as displacement of an other employee but in reality it is. Without the intern we would have to hire someone to do the job.  Now, I can easily see and make the arguments, that the fact that we have interns makes the decision to do a show with say a big set with lots of changes possible but would all of our programming stand up to exemplify that was the case?  Overall, I must guess no.  Does this mean that if an intern works in the box office as part of their internship we are in conflict with the guidelines.

3.  Many companies allow interns to take on responsibilities outside of the internship to make extra money (box office, house management, crew, etc.).  Is this in conflict?

All of this is very important to me because I a firm believer that we as artists and organizations have a moral obligation to help train future generations.   But I understand the economic challenges of this training.  It is an unfortunate reality that most organizations can’t afford to pay interns minimum wage and it is heart-breaking because it creates all sorts of issues, the most difficult to accept being that the programs are populated by interns whose families can afford to provide financial support.

So, if anyone out there has more information that would help other organizations please share!  If you were at the TCG conference and there was some insight provided please share!

Some other articles of interest:

Rites of spring: The hidden dangers of hiring unpaid interns

Small businesses hire unpaid interns this summer – Associated Press

FLSA and the Summer Intern

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