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Do I Have to Pay My Interns

Published on Friday, July 19, 2019

Do I Have to Pay My Interns

By Julian Parsons - Sydney

Do you have to pay your interns?

The short answer is yes and no.

Under Australian law, you must financially compensate anyone who comes to your workplace to contribute through ‘productive work’.

However, there are perfectly legal ways to bring on unpaid interns in a meaningful capacity that supports the goals of both employee and employer.

According to Fair Work Australia, a legal unpaid internship is defined as;

“The person who’s doing the work should get the main benefit from the arrangement. If a business or organisation is getting the main benefit from engaging the person and their work, it’s more likely the person is an employee.”

While there are many internship types, employers will always be at risk of breaking the law if they use interns to carry out work that would otherwise be carried out by a paid employee.

Despite this, it is common for recent university graduates or job-seekers to accept unpaid internship roles to help get a foot in the door of their chosen industry, with young workers excited to take the first step towards their new careers.

In fact, according to a survey commissioned by the Federal Department of Employment, more than 50% of young adults in Australia have completed unpaid work as part of an internship or trial.

So, if you’re looking to include interns in your business, here’s what you need to know to stay on the right side of the law, provide value to your business, and most importantly to your interns.

What Tasks Can an Intern Do?

What Tasks Can an Intern Do?

The most important thing to remember is that an intern cannot be considered as unpaid labour.

So the tasks you assign to them cannot mimic those of a full-time employee.

Remember, the work done by your intern must benefit themselves over your company. Because of this, the safest course of action is to provide tasks that further their individual learning or experience.

For example, a digital marketing intern would benefit from shadowing a social media manager to learn about the process of social media marketing.

Figures show that 81% of adults between 18-29 using Facebook, and a further 64% using Instagram, interns can help your company’s social media management efforts.

In this example, the primary workload is being carried out by the full-time employee, with the intern is in a learning role.

This is reinforced by Sydney SEO agency Search It Local who are specialists in this field, having created an intern pathway program to provide value, saying “we promote a culture of communication to ensure our interns are feeling both a part of the team, and like they are learning from their experience. With regular meetings and activities we’ve brought 3 full-time employees through our structured internship program.”

What Questions Should I Ask Before I Bring on an Intern?

Your internship opportunities must be set-up in a way that benefits your intern, and not in an employment relationship.

Finance company, Credit Capital, agree and use this to help identify future talent, saying “we communicate clearly the expectations and boundaries for our interns, but encourage creativity and problem-solving. When an individual thinks outside the box and looks to solve a problem outside of their direct training, we consider that an exceptional green flag for future employment.”

How do you identify whether you have entered into an employment relationship instead of an internship arrangement?

Consider the following:

  • The purpose of this relationship: Is it to provide experience to a job-seeker or to benefit your business with increased productivity?
  • The length of the internship: Typically, internship periods cap out at 12 weeks. The longer the relationship, the more likely the person should be trained to go to become an employee.
  • The beneficiary: The benefit should be seen going towards your intern, not your business outcomes. Keeping your internship observational will help the benefits flow the right way.
  • The day-to-day task: Your intern can still carry out meaningful and productive work. But this should not be the expectation, instead, the by-product of their learning experience.

Final Thoughts

When managed properly, internships are a valuable learning experience for young adults, while providing support and assistance to employers.

While the goal is never to use an intern instead of a paid employee, when you follow the tips outlined in this article, you’ll be staying on the right side of the law.

Even better, you’ll give your interns a chance to demonstrate their value, and help you identify and acquire the talent of the future.

Are you looking to bring on interns? 

Let us know what you have planned in the comments!


Author Bio:

Julian Parsons is an Australian writer and a business administration student living in Sydney. He is passionate about financial data and project management. Julian enjoys photography and when he’s not studying or writing, you’ll find him outdoors capturing shots of nature.

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