Peril of unpaid internships among legal issues facing local news sites

By Matt DeRienzo | Jun. 8, 2015

Jan Schaffer

Shoestring-budget local news sites eyeing unpaid interns as a source of content might want to rethink that strategy, journalism startup guru Jan Schaffer told a group of publishers in Philadelphia on Sunday.

It’s not just about wage claims, she said. Unpaid interns fall into a gray area of not being an employee, and not being a contracted freelancer. Schaffer sees potential for unpaid interns to claim copyright over the content they produce for news sites, whereas it’s clear that publishers own the content of their staff writers and freelancers who sign a contract saying as much.

Schaffer, director of journalism business incubator J-Lab, spoke at LION Publishers’ “Independents’ Meeting” at Temple University about various legal issues facing online news sites. She recently co-authored a guidebook on the topic with attorney Jeff Kosseff on behalf of the Tow-Knight Center for Entrepreneurial Journalism at CUNY’s journalism graduate school.

Behind revenue, legal issues are among the most frequently cited struggles of independent local online news publishers.

Schaffer’s guidebook includes advice on corporate structure, labor law, copyright and fair use, native advertising, privacy policies, defamation, user-generated content, access to information and places and confidentiality.

She said interns can’t simply do work a regular employee would do, and can’t displace a paid employee with the work they are doing. The internship needs to be instructional in nature, and should benefit the intern more than the employer, even to the point of disrupting or impeding the business's regular operations. Making sure they are receiving college credit for the internship can fulfill the instructional component, she said, but won’t necessarily protect an employee 100 percent.

For small news sites that are one- or two-person operations, the question, Schaffer said, is “are you using them in lieu of hiring employees?”

Local publishers who are paying sales reps as independent contractors, and writers as freelancers, should make sure they are working out of their own space and with their own equipment, have other clients and set their own hours, she said. If not, they could be vulnerable to a claim that they were de facto employees who should have been subject to payroll withholding taxes and possibly qualified for benefits.

A significant portion of LION’s members publish nonprofit sites or have thought about filing for nonprofit status.

Schaffer said it’s not a slam dunk. “The IRS does not recognize journalism as a charitable enterprise,” she said, and you have to show that your content is educational and that your distribution model is “distinguishable from ordinary publishing.”

Founders of local news sites who are used to the operation being all about their vision and interests also have to be prepared to cede some control if they go the nonprofit route. Schaffer said that answering to a board of directors that can fire you and go in a different direction could be a wakeup call for some.

Schaffer urged publishers to be cautious about using photos posted by the public on social media sites. Ask permission, she said, and make sure that the person who posted the photo actually took it. Be skeptical if it looks professionally done, she said.

She also addressed the relatively new phenomenon of native advertising, noting that, unlike many other media matters, it is regulated by the Federal Trade Commission. The bottom line is avoiding deception, she said, and the uncomfortable reality for publishers is that businesses like native advertising because most readers don’t know it’s advertising.

She suggested avoiding bylines on sponsored content so it looks less like staff journalism, and to make sure that a “sponsored” label goes out on social media pushes of sponsored content, not just stuff that lives on your site.

Prior to J-Lab, Schaffer was director of the Pew Center for Civic Journalism, which funded 120 journalism pilot projects over the course of a decade. As a reporter at the Philadelphia Inquirer, she won the Pulitzer Prize for Public Service in 1978 and went on to become the newspaper’s business editor.

The full, 12-chapter guidebook she authored with Kosseff can be accessed here.