You can’t avoid paying lawful entitlements to employees by labelling them ‘interns’. If they’re performing productive work for your business, they are legally entitled to be paid minimum award rates.

Unpaid internships involve placements in a wide range of businesses, not-for-profit organisations and government agencies and can be invaluable to an individual’s career growth.

They typically offer a taste of what’s involved in a job or industry, plus the chance to network and fill out a resume with practical, on-the-job experience.

However, there are a number of considerations you should make as a business owner before engaging an unpaid intern to ensure you’re providing them with a career opportunity. And avoiding an arrangement that can be viewed as exploitation.

When is it lawful to engage an intern without paying them?

Generally speaking, it depends on whether the arrangement can be characterised as ‘employment’. To determine whether the arrangement is ‘employment’ ask yourself these questions:

1. Are the intern’s responsibilities more productive than observational?
2. Will the intern perform administration duties?
3. Will the intern collect coffee orders? This is assisting, not learning.
4. Will the intern replace a paid employee?
5. Will their workload and responsibilities be similar to a paid employee?
6. Does your business rely on interns for ongoing duties? This can be classified as an entry-level job.

If you answered ‘yes’ to any of the above, it’s likely your intern qualifies for minimum award rates.

The Fair Work Ombudsman explains: “If the purpose of the work experience, placement or internship is to give the person work experience, it is less likely to be an employment relationship.”

“But if the person is doing work to help with the ordinary operation of the business or organisation it may be an employment relationship arises. The more productive work that’s involved (rather than just observation, learning, training or skill development), the more likely it is that the person’s an employee.”

For more information about internships in Australia visit the Fair Work Ombudsman’s website.