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Danielle N. Garno, (left) and Elisa M. Hevia, (right) of Greenberg Traurig.

In the wake of several lawsuits filed by interns for unpaid wages against fashion powerhouses like Donna Karan, Marc Jacobs, Gucci, The Row, and Hearst Communications (Elle, Marie Claire, Cosmo, Seventeen), the U.S. Department of Labor (DOL) announced that it will use a new test—the “primary beneficiary” test—this test was established by the Second Circuit in Glatt v. Fox Searchlight Pictures, 811 F. 3d 528 (2d Cir. 2016)—to determine whether interns are employees (and therefore entitled to minimum wage) under the Fair Labor Standards Act (FLSA).This is a significant policy shift from the DOL’s previous test which was found by courts to be too stringent and which just may breathe life back into the fashion industry’s internship programs. Under this more flexible test, courts are taking a more holistic approach to determine whether an intern should be paid. You can expect this to affect the way employers market and implement their internship programs.

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