Written by Jillian Collins
While the Boston Red Sox celebrate their first World Series clinched at Fenway Park in 95 years, two teams that missed the playoffs are making headlines for their pay off the field. The U.S. Department of Labor’s crackdown on classification of unpaid interns has spread to Major League Baseball, with the DOL launching an investigation this month into the San Francisco Giants and the Miami Marlins.
DOL officials have not released specific details about the case, but the Labor Department has honed in on Major League Baseball teams following a previous investigation that concluded that questionable pay practices were “endemic” to the industry. This is the second investigation this year into the San Francisco Giants improperly paying its employees. The Giants are less than two months removed from settling another DOL investigation, in which the team paid $544,715 in back wages to employees because the club had failed to properly pay workers minimum wage and overtime and had not complied with record keeping requirements.
Unpaid internships are prevalent in the sports and entertainment industries where people are often willing to work for no money just to get their foot in the door. But this industry staple may be a thing of the past as employers reevaluate their relative value in light of several high profile lawsuits. Just last week, Condé Nast, which is responsible for publishing The New Yorker, Vanity Fair and Vogue, announced it was closing its internship program in the wake of lawsuits against Hearst Magazines and Fox Searchlight Pictures, among other companies, from former unpaid interns for violation of federal and state wage and hour laws. With the DOL’s focus on this issue and several high profile lawsuits making headlines, employers should closely evaluate if their unpaid intern program is compliant with federal and state laws. Factors that suggest that an intern is actually an employee include if the internship experience is for the benefit of the employer and if the employer derives an immediate advantage from the activities of the intern. For their part, the Giants, the Marlins and the MLB as a whole look to have plenty of work to do in the off-season to ensure their pay practice comply with the law.