Â
Internships are becoming more common as businesses recognise their value. Many university students engage in internships as a way of gaining experience within an industry. Consequently, many internships are unpaid. So is this legal? Read our guide to find out whether unpaid internships are legal.
What is an Internship?
An internship is a monitored work experience whereby a person will gain skills, knowledge and experience within an industry. An intern is commonly a student or trainee wanting to enter the industry. Hence, most internships are without pay and continue for a specified time period.
Sometimes internships or placements may be required as part of a student’s degree or course. On the other hand, many student’s choose to engage in internships to explore a certain career path. For more information, you can read our guide ‘Hiring Volunteers or Interns‘.
Â
Do You Have to Pay an Intern?
A common question businesses ask is whether you have to pay an intern? The simple answer is no. Therefore, as the purpose of an internship is for experience and exposure to an industry, payment is not legally required. The Fair Work Act 2009 (Cth) regulates this area. Specifically, it defines internships as ‘vocational placements’, which ‘provide students with the opportunity to apply theory and skills they learned while studying in a professional workplace’.
Hence, internships that meet the Fair Work definition of ‘vocational placements‘ can be lawfully unpaid.
Get a free legal document when you sign up to Lawpath
Sign up for one of our legal plans or get started for free today.
Â
Important Considerations
So now we know internships can be lawfully unpaid. However, there are a few important things you should note. Firstly, as a business you should ensure all interns sign an Internship Agreement. You can customise our Internship Agreement for free. An Internship Agreement covers:
- Nature of relationship
- Time period
- Role and responsibilities
- Confidentiality
- Intellectual Property
- Termination
- Learning objectives/obligations
- Equipment usage
It is important for both parties to understand that this is not an employment relationship. Rather, the primary purpose is for the intern to observe the businesses operations and learn from practical experience. Hence, the intern is not entitled to any leave benefits such as sick leave or annual leave.
Parties should agree on a set time period for the internship so no confusion arises down the track. Internships commonly range from 4-12 weeks, in either block full-time periods to 1 or 2 days a week.
As an employer, you must ensure you do not mischaracterise the relationship. If you are found to have engaged in an employer-employee relationship, rather than an internship, you can face hefty fines. Breaches to the Fair Work Act 2009 can be up to $54,000. If you aren’t sure whether you have an employer-employee or internship relationship, we recommend consulting an Employment Lawyer.
Â
Final Thoughts
To conclude, unpaid internships are legal. This is because the purpose of an internship is to provide a person, usually a student or trainee, with experience in the industry. The value of an internship is primarily with the intern as they are able to develop skills and knowledge in an enriched learning experience.
Â
