Viacom Settles Intern Lawsuit for $7.21 Million

Last month, Viacom, Inc. (the world’s sixth largest mass media company) settled a class-action lawsuit with 12,500 former interns. Viacom, the owner of Comedy Central, MTV and Nickelodeon, will have to pay out $7.21 million to interns who claimed they were paid less than minimum wage or not paid at all. By not paying interns for doing similar work as paid employees, Viacom violated both federal and state labor laws.

The law on unpaid internships has been clarified in recent years. Employers can only do unpaid internships if the real benefit of the internship is almost only to the intern. Otherwise, making them work for free for the employers benefit violates state and federal minimum wage laws.

While the initial suit was filed by an ex-MTV intern Casey Ojeda on August 2013, the deal will include all interns who worked in the company’s NYC offices from 2007-2013 as well as those who worked in their California offices from 2010-2013.

Though other companies such as NBCUniversal, Saturday Night Live, and Condé Nast have had similar suits filed against them, this intern settlement case marks one of the largest in the media industry.

What do you think the effect of this will be on company’s hiring unpaid interns? Will they continue to hire interns, but pay them minimum wage?