Hiring an intern can bring about mutual benefits for the intern and your business, but you could be supporting an unlawful business relationship if you aren’t careful.
According to Fair Work Australia, if an intern is performing certain roles, it could classify their position as one that facilitates an employment relationship between them and the business or organisation they are interning for. If the relationship can be recognised as an employment relationship, based on a number of indicators, as the employer, you will legally be required to treat them as an employer and pay them accordingly.
Indicators that warrant an intern has an employment relationship with the business or organisation include:
– Clear intention to enter into an agreed arrangement to do work for the employer.
– Performing any such work that will benefit the business or organisation, unrelated to them running a business of their own.
– If the person is under the expectation that they will receive payment for their services.
If you are looking to hire an intern, in addition to considering the above indicators, take on board the following factors that could lend an intern to actually being recognised by the Fair Work Ombudsman as an employee.
While the individual may be part of productivity activities through active training and skill development, this doesn’t automatically mean they are in an employment relationship, particularly if they aren’t required or expected to meet targets or be productive each day.
Duration is a large indicator of the nature of the relationship. Generally, the longer an individual is involved with the business or organisation, the more likely the person should be recognised as an employee.
Reason for the internship
The purpose for the intern being there is of significance. If the main reason is to gain industry experience, it is likely to be an internship. However, if they are fulfilling a role that helps with the ordinary operation of the business, and their tasks are directly linked to productivity rather than just observing and learning, it is more likely to be an employment relationship.
Significance to the business
If the work the intern is carrying out is work that would otherwise be part of the job description of a paid employee, it is likely the intern should legally be regarded as an employee.
Who is benefiting?
The intern should be the party receiving benefit out of the internship arrangement, not the business. If the business or organisation is the party receiving the greater benefit, this is more often than not an employment relationship.