On Tuesday, New York City Mayor Bill de Blasio signed into law an act that will grant interns all of the rights afforded to employees under the New York City Human Rights Law. The act comes on the heels of several landmark cases (see our prior blog for a discussion) and is demonstrative of increased scrutiny of the internship model in a market where the average student loan debt is $25,000  and those aged 16-24 face 50.7% unemployment.

The city council appears to have been spurred into action at least in part due to the recent decision in Wang v. Phoenix Satellite Television, 13 Civ. 218 (PKC) (Oct. 3, 2013). There, the plaintiff, an unpaid intern, alleged that she had endured a hostile work environment and unwanted groping by the bureau chief of a Hong Kong-based media conglomerate. Id. at 4. After noting that the plaintiff did not receive any remuneration for her labors, the court came to a conclusion rooted in established precedent. “In sum, the plain meaning of the NYCHRL, the case law, interpretations of analogous wording in Title VII and the NYSHRL, as well as the legislative history of the NYCHRL all confirm that the NYCHRL’s protection of employees does not extend to unpaid interns.” Id. at 16.

Such results, combined with the shaky economic footing of recent graduates, have led to calls for reform. In many circumstances, the original incentive of the internship model—the lure of college credit—has been abandoned entirely. For example, Yale’s career website states that neither Yale nor any other Ivy League school offers credit for internships. According to the National Association of Colleges and Employers (NACE), “[o]nly 29.9 percent of colleges that allow the posting of unpaid internships require their students to obtain academic credit or a certificate as part of the internship.”

In many cases, an internship can lead to full-time employment after college. However, NACE found that while 63.1% of paid interns received a job offer in 2013, only 37% of unpaid interns received an offer. Furthermore, the starting salary for those who worked in an unpaid internship ($35,721) is lower than the starting salary of a person with no internship experience at all ($37,087).

NYC Human Rights Commissioner Patricia L. Gatling believes that the City has found an answer to some of the more unsavory internship arrangements. “With the Mayor’s signature on this important piece of legislation, interns who are especially vulnerable to abuse and structural discrimination, are among the least able to defend themselves, and are among the most in need of special protection, will be protected under the law.” Nevertheless, such legislation does raise questions about the legal implications of legitimate internship programs—some employers might choose to terminate their offerings rather than deal with a compliance headache.

If you have any questions with respect to the passing of this statute please contact our office at (212) 323-6980 or at info@aronauerlaw.com.