For many young Americans, internships provide an exciting first glimpse into the working world. In 2021, 75% of graduating college seniors indicated that they’d had at least one internship. But despite the many benefits that interns can provide to employers, over 40% of internships in the United States today are unpaid.
The debate over these arrangements is contentious. Proponents note that even when unpaid, internships provide young people with the freedom to explore various potential career paths and the ability to develop skills that will make their resumes stand out to potential future employers. Others view unpaid internships as exploitative arrangements that perpetuate societal inequities by preventing those who can’t afford to work for free from gaining valuable professional experience and connections.
While unpaid internships are not illegal by default, it’s not always apparent whether an internship program is structured in such a way that the employer is required under federal or state law to provide compensation. This uncertainty is especially apparent in the world of social media influencers, who are increasingly hiring interns to help them create new content and manage relationships with the brands these influencers promote.
Unpaid Internships and Labor Law
The Fair Labor Standards Act (FLSA) establishes minimum wage and overtime pay standards for employees in the private sector as well as in Federal, State and Local governments. While the Supreme Court has yet to address the difference between employees and unpaid interns under the FLSA, it did hold in 1947 that unpaid aspiring railroad brakemen were “trainees,” not employees, within the meaning of the Act. As a result, they were not entitled to compensation for the weeks’ worth of labor they provided. The Court based this decision partly on the fact that the trainee’s work did “not expedite the railroad’s business,” but rather “impede[d] and retard[ed] it.”
In a similar dispute in 2015, the Second Circuit vacated a District court’s finding that two interns who worked on the award-winning film Black Swan were entitled to payment from production company Fox Searchlight. The Court held that the proper analysis in such cases involves asking whether the intern is the “primary beneficiary” of the relationship. If she is, she does not qualify as an “employee” and thus is not legally entitled to a minimum wage under the FLSA. According to the Court, the primary beneficiary test has three main features. First, “it focuses on what the intern receives in exchange for his work . . . [s]econd, it . . . accords courts the flexibility to examine the economic reality as it exists between the intern and the employer . . . [t]hird, it acknowledges that the intern-employer relationship should not be analyzed in the same manner as the standard employer-employee relationship because the intern enters into the relationship with the expectation of receiving educational or vocational benefits that are not necessarily expected with all forms of employment.” In other words, it is legal for employers not to compensate interns as long as the intern “receives identifiable educational or vocational benefits in return.”
Social Media Influencing on the Rise
Social media use has grown rapidly in the past decade, and the number of influencers has grown with it. Generally speaking, a social media influencer is a person who has expertise on a particular issue—whether it be fashion, home décor, cooking, or any other topic—and shares content and promotes products related to that niche. This content can take the form of Instagram posts, TikTok and YouTube videos, blog posts, and more. Brands are increasingly partnering with influencers by paying them to promote products across social media platforms, and often offer compensation based on the number of followers the influencer has.
Given that over 50% of millennials and Gen Zers would become influencers if they could, according to a recent survey, it is no surprise that there are many young people looking to gain hands on experience in this field, even if it means working for little or no pay.
Content creation businesses tend to scale up quickly, and often this leaves new influencers feeling overwhelmed and in need of assistance. Given that over 50% of millennials and Gen Zers would become influencers if they could, according to a recent survey, it is no surprise that there are many young people looking to gain hands on experience in this field, even if it means working for little or no pay. But for content creators looking for extra help, the story of influencer Audrey Peters should serve as a cautionary tale. After posting an Instagram story stating that she was looking for an unpaid intern, Peters faced swift and intense backlash from her followers, who called out her post as distasteful and decried unpaid internships as unethical and exploitative.
Influencers’ Assistants: Unpaid Interns or Employees Entitled to Compensation?
As of today, few if any interns have taken legal action against the influencers they apprentice under. However, one lawyer whose firm represents content creators notes that “a disgruntled intern always has the option to complain to a state’s labor authorities, and they will take action, which will result in accountability.” Similarly, the chief of executive and founder of Intern Queen, a career advice website, noted that federal guidelines are ambiguous, and that there is nothing to stop an influencer’s intern from coming forward years down the road and filing a lawsuit asserting that he or she wasn’t fairly compensated.
Indeed, it is unclear how the Second Circuit’s “primary beneficiary” balancing test would apply in the context of an influencer-intern relationship. The lack of formality that often characterizes these agreements, coupled with the fact that they bear little resemblance to any educational programming that the intern would likely be engaged in at school, would make it difficult to apply the test as described in the Fox Searchlight opinion. Given this uncertainty, it would be wise—not to mention ethical—for influencers who bring assistants into their businesses to pay them no less than minimum wage for their work. Not only would this guard against potential future legal action, but it would help to mitigate the barriers currently preventing less privileged young people from breaking into this exciting and lucrative line of work.
Emily grew up in Long Beach, California and studied Urban & Environmental Policy at Occidental College. After graduation she spent several years working as a Legislative Assistant to a member of the House of Representatives in Washington, D.C. She later joined the Government Relations team at The Wilderness Society where she advocated for policies to protect national forests and other public lands. In her spare time Emily loves running, baking, and discovering new ice cream shops.
See the author’s previous blog post here.