Second Circuit Adopts New ‘Primary Beneficiary Test’ for Determining Whether Unpaid Interns Are Employees

A recent wave of multimillion-dollar lawsuits brought against employers by unpaid interns demanding compensation for their work has resulted in settlements but no definitive word from the federal courts on when interns should be considered employees. Despite the volume of litigation in this area, the factors that federal district courts have considered to determine whether an intern must be paid have varied, leaving the issue unsettled — until this month, when the U.S. Court of Appeals for the Second Circuit ruled on the issue. On July 2, 2015, the Second Circuit in Glatt v. Fox Searchlight Pictures held that a new test — the “primary beneficiary test” — should be used to determine whether an intern must be considered an employee and thus paid.