One of the more controversial groups of non-employee workers is unpaid interns. In theory, an internship offers educational benefits in exchange for unpaid work. Too many employers exploit interns as mere substitutes for paid employees. In recent years the courts have had to pay greater attention to this issue, setting forth specific standards for who qualifies as an “intern” versus who must be classified as an “employee” under the Fair Labor Standards Act and the New York Labor Law.

For example, the U.S. Second Circuit Court of Appeals here in New York recently dismissed a lawsuit brought by a former college student from Long Island. In 2013, the plaintiff’s university placed her in an internship program with a private employer. According to her complaint, the plaintiff said she was assigned to perform “secretarial tasks” and “grunt work” that provided “nothing of educational value.” When she complained to the university, she said she was expelled. While the school later readmitted her as a student, it refused to give her any academic credit for the internship.

In effect, the plaintiff said the private employer got the benefit of her labor for nearly a year and she never received any compensation in return. As the Second Circuit explained, she was never an “employee” as far as the law was concerned. In 2015 the Second Circuit, ruling in a similar case, said there were seven factors a court should consider when classifying someone as an intern versus an employee. Here, the Court said six of those factors clearly weighed in favor of classifying the plaintiff as an intern:

• The plaintiff and the employer clearly understood there was “no expectation of compensation” from the beginning;
• The plaintiff received “educational training”;
• The work performed was tied to the plaintiff’s “formal education” and she “would have received academic credit” had she completed the internship in a “satisfactory manner”;
• The plaintiff’s internship was limited to a period that coincided with the university’s academic calendar;
• The plaintiff’s work periods were tailored accommodate her class schedule; and
• The plaintiff was never promised a “paid job at the conclusion of the internship.”

The seventh factor–whether the plaintiff’s work displaced that of paid employees–was “a wash” at best, according to the Second Circuit. Regardless, the Court said the plaintiff failed to establish she was a bona fide “employee.” Accordingly, the Court said she was not entitled to proceed with a claim for unpaid wages.