How should you deal with internships and unpaid work? A SmartCompany Q&A

There’s been a lot of talk about internships recently and the potential problems of exploitation employers can run into when they take on free labour.

The spotlight has again been thrown on internships this week, as commercial work experience organisations admitted to charging students thousands of dollars for placement.

Private company Australian Interns charges students between $2000 to $5500 for the opportunity to work for free in a range of industries including hospitality, manufacturing and finance, according to Fairfax.

Australian Interns managing director Diana van Woerkom defended the courses, saying the internships were linked to major universities around Australia and were an integral part of academic degrees.

“I don’t support students making tea and coffee, it needs to be benefiting students,” said van Woerkom.

But a survey by advocacy group Intern Australia found 70% of internships undertaken by students and young people were not linked to any course and only 30% were structured.

So how do you get it right and avoid exploitation? SmartCompany answers some of your burning questions.

What’s the deal, do I have to pay interns?

No. According to the Fair Work Ombudsman, unpaid work experience or unpaid internships are okay as long as your intern isn’t in an ‘employment relationship’ – or in other words, if they are actually an employee.

Obviously, if they are an employee, you need to pay them.

OK smarty pants, how do I work out if they are employees or interns then?

Ask yourself, is the purpose of the internship to give the person work experience or to get the person to help with the business’ ordinary operations?

The more productive work a person does (rather than just observing and learning), the more likely it is that you’ve got yourself an employee.

This is especially the case if the work they’re doing is normally done by paid employees and the business needs this work to be done to operate successfully.

So what can I get them to do?

The main benefit of an internship has to go to the intern, not you. It must be clear that the person is receiving a meaningful learning experience, training or skill development.

That means you can get them to do tasks in which they will learn and develop skills. It doesn’t mean you can slack off and make them do another employee’s work.

Remember, if they’re acting in the capacity of an employee – you have to pay them.

How long can I keep an intern?

While there are no hard and fast rules about how long you can have an intern, the longer they stay, the more likely the person is a an employee.

While it’s not the law, it’s probably also good practice to be clear to interns about what they will get at the end of the internship. It might not be a good idea to mislead them into believing there is a job at the end of the internship rainbow if there isn’t.

Do all my interns have to be uni or TAFE students?

No. As long as the intern passes the employee test (see above).

If they are doing a vocational placement with a university or training organisation, you definitely shouldn’t pay them.

Placements like this need to be arranged through the educational or training institution and be in line with the requirements of the course. If you are unsure of whether or not the placement seems genuine, you should do some research.

What about unpaid trials?

You can ask potential employees to complete an unpaid trial if it is necessary to evaluate their suitability for the job.

The trial must involve no more than a demonstration of the person’s skills, where they are relevant to the position and only last for as long as needed to show that. Depending on the nature and complexity of the work, this could range from anywhere between an hour to one whole shift.

You also have to keep the employee under direct supervision for the entire time

If you want to continue to assess their suitability for their job beyond this period, you can offer them casual work or a probationary period in a paid position.

Finally, the most important question: can I get the intern to fetch me a coffee?

Technically, yes, the same way you can ask any employee to get you a coffee. But you don’t want to do too much of that, because then the intern can make the case that they are not having a meaningful learning experience.

Be fair to your interns, because like your employees, they are an important asset to your business. You never know the talent you’ll meet and be able to poach along the way.