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Unpaid Internships In Jeopardy After Court Ruling

By SAM HANANEL

WASHINGTON (AP) â¿¿ Unpaid internships have long been a path of opportunity for students and recent grads looking to get a foot in the door in the entertainment, publishing and other prominent industries, even if it takes a generous subsidy from Mom and Dad.

But those days of working for free could be numbered after a federal judge in New York ruled this week that Fox Searchlight Pictures violated minimum wage and overtime laws by not paying interns who worked on production of the 2010 movie "Black Swan."

The decision by U.S. District Judge William H. Pauley III may lead some companies to rethink whether it's worth the legal risk to hire interns to work without pay. For many young people struggling to find jobs in a tough economy, unpaid internships have become a rite of passage essential for padding resumes and gaining practical experience.

"I'm sure this is causing a lot of discussions to be held in human resource offices and internship programs across the country," said David Yamada, professor of law at Suffolk University in Boston.

There are up to 1 million unpaid internships offered in the United States every year, said Ross Eisenbrey, vice president of the Economic Policy Institute, a liberal-leaning think tank. He said the number of internships has grown as the economy tumbled and he blamed them for exploiting young workers and driving down wages.

"The return on a college investment has fallen, students are facing higher and higher debt burdens, and the reaction of employers is to make matters worse for them by hiring more and more people without paying them," Eisenbrey said.

In the ruling, Pauley said Fox should have paid the two interns who filed the lawsuit because they did the same work as regular employees, provided value to the company and performed low-level tasks that didn't require any specialized training.

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