A San Jose venture capital firm has been ordered to pay more than $300,000 in back wages and damages to dozens of employees who worked as unpaid interns, the U.S. Department of Labor announced Monday.
Fenox Venture Capital will pay $331,269 to 56 employees who worked as unpaid interns between September 2011 and September 2014, according to the labor department.
The employees reportedly performed high-level jobs such as screening start-up companies for potential investment, sending reports to investors in Japan and networking and recruiting potential employees for the company.
The workers displaced regular employees, staffed the majority of the company's investment team and performed duties that benefited the company directly, labor department officials said.
In treating the workers as unpaid interns, the company violated the minimum wage provisions of the federal Fair Labor Standards Act, according to the department.
The Fair Labor Standards Act requires that covered, non-exempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus 1.5 times their regular wages for hours worked beyond 40 per week, labor department officials said.
"Employers cannot simply label an employee an 'intern' and not pay them anything," Susan Blanco, district director for the Wage and Hour Division in San Francisco, said in a statement.
"Ensuring these workers receive the wages that they rightfully earned will help them and their families, and will also help to level the playing field for law-abiding companies," Blanco said.
Officials at Fenox Venture Capital were not immediately available to comment on the case.