The New Protected Class: Unpaid Interns (Are They Worth the Trouble?)

It is a constant challenge for employers to keep up with the panoply of protections afforded to actual employees by federal, state and local employment discrimination and other laws. Beware — there is a new trend afoot that adds yet another layer of compliance complexity. States are beginning to extend the protection of employment discrimination laws to a distinct category of persons who are not even employees at all — unpaid interns.

Just a few of weeks ago, Illinois amended its employment discrimination prohibitions to extend protection to unpaid interns, confirming what has become a trend. The trail was first blazed by a 2013 Oregon law extending discrimination and workplace harassment protections to interns. New York City and Washington, DC followed suit with similar protections. Then in July 2014 the State of New York amended its employment discrimination law to cover unpaid interns. And now, Illinois accelerates the trend.

What does this mean for employers in Oregon, Washington D.C., New York, and Illinois? They can now be sued by an unpaid intern who claims the company failed to hire him or her, failed to grant him or her a favorable training or work opportunity, terminated the internship, or made any other decision regarding the terms and conditions of the individual’s internship based on the intern’s protected status. In Illinois, for example, a company cannot make any decisions regarding an intern based on that intern’s race, color, religion, national origin, ancestry, age, sex, marital status, order of protection status, disability, military status, sexual orientation, or unfavorable discharge from military service. Additionally, based on a new Illinois law that requires employers to make reasonable accommodations for pregnant employees, unpaid interns in Illinois will also be entitled to reasonable accommodations for pregnancies as well as for disabilities. And of course, an unpaid intern in any of these jurisdictions could sue for sexual or other harassment in the workplace.

In light of this trend, a few words to the wise:

1. Employers should reassess whether it even makes sense to have an unpaid internship program at all. The legal developments in recent years have clearly increased employers’ liability exposures for wages, and now discrimination. Is an unpaid intern worth it? The Department of Labor wage and hour standards for interns confirms one of the factors it considers to determine if an individual may be validly classified as an unpaid intern, as opposed to an employee, is whether “The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.” It may be hard to justify taking on an unpaid intern if the standard essentially requires that the individual actually impede the business and add no value. (In the old days this was a role typically reserved for the boss’s kid during summers between school years.)
2. If an employer nonetheless has an unpaid internship program, the program must be open to all. A well-intentioned internship program for minority students that has been operated successfully for years may now represent illegal race discrimination against non-minority students who would like to participate in the internship. Similarly, employers should not reject 50 or 60 or 70 year-old persons who seek to participate in the company’s unpaid internship program based on their age. (For a few laughs, see Owen Wilson and Vince Vaughn in The Internship, a 2013 comedy about two middle-aged guys who find themselves in the internship program at Google.)
3. An employer cannot play favorites among the unpaid interns in any manner that might support a claim by one that other interns received better projects, training, networking opportunities, exposure in the company or anything else because of their gender, or race, or age, or any other category protected by the employment discrimination laws. Now maybe even the opportunity to fetch a double mocha latte and deliver it to the boss has to be awarded on a basis that is entirely non-discriminatory.
4. The employer should update any anti-discrimination and anti-harassment policies to cover unpaid interns and make sure the interns also understand these principles. Anti-harassment training of employees should emphasize that the policy covers unpaid interns, and stress that any sexual or other harassment of unpaid interns is a violation that will not be tolerated. This is important because often young, inexperienced and impressionable interns can be vulnerable targets for harassers in the workplace – or engage in inappropriate behavior amongst themselves.