The Department of Labor has ordered Fenox Venture Capital firm to pay around $331,269 as damages and back wages for wrongfully naming 56 staffs as interns. The staffs involved in this issue performed jobs like recruiting workforces, sending reports to Japanese investors and seeking investment for start-up firms.

The workers completed the regular duties similar to that of an established company staff, but still they were considered as interns by Fenox that failed to pay these workers. According to the director of Wage and Hour Department in San Francisco, Susan Blanco, the employees need to be paid correctly and that no employers can classify any employee as an intern as reported by Silicon Beat.

The company disrupted the minimum wage law, which states that all "non-exempt" employees must be paid a minimum of $7.25 an hour. Michael Eastwood, an assistant district director at the Department of Labor, said that few unpaid staffs associated in this matter had come from Japan to the US to work in Fenox. The company aids employers in North America to expand their business in the Middle Eastern, European and Asian markets.

The Wall Street Journal quoted Michael Eastwood who said it is common for US businesses to simply name staffs as interns to pay very below the least wage amount but it is the first time a venture capital company has involved in such practices. The unpaid staffs belong mainly to the late teenage and early twenties group.

According to Vivek Ladsariya, the leader of investments department at Fenox, the company utilized the internship approach to locating fresh talent among the staffs. He continued that few current staffs were recruited through this program. The aim of the internship program was to provide chances for people to work in a venture capital firm. Ladsariya added that the company has currently opted a paid internship approach. The company has raised nearly $400 million during the previous few month period and has spent in start-up companies like ThirdLove, Gobble, Jibo, Edyn, Bluesmart and Money Forward, according to the sources.

As per the Fair Labor Standards Act, interns can work without receiving any wages only if they receive training similar to that of their educational system in the internship program. Moreover, the interns must receive wages if the employer benefits from their work.

Fenox has joined hands with Japan-based Infocom Corporation in order to unveil GnB Accelerator. The main target of this act is to establish the finest start-up environment by merging the start-up expertise from the Silicon Valley, Southeast Asian local skills and corporate skills of Japan. The GnB Accelerator will come to live on April 2016 and will spend nearly $50K into every single start-up firm. Kentaro Hashimoto has been named as the leader of the accelerator program. Other mentors include Diajeng Lestari, Kevin Mintaraga, Joshua Kevin and Willson Cuaca, as reported by e27.

Fenox sloppiness in the payment system of its workers is considered as an illegal practice that needs to be advised. The company promises to avoid such situation in the future.