If you’re studying or looking to change careers, you’ve probably encountered the ‘experience paradox’. Most job ads prefer that you have previous experience in the industry, but you can’t get that experience without a job in the first place. Enter: unpaid internships.
They can give you the experience you need to flesh out your resume in return for some unpaid work. However, it’s important you understand your rights about unpaid shifts and extended unpaid trial periods.
The need for unpaid internships
Internships are more common in highly competitive fields like communications, advertising, law and media. In addition, unpaid work can also occur in trade-based workplaces, white-collar administration jobs, teaching, health services, retail and more.
Unpaid internships are not only a ‘foot in the door’ – they help build practical industry knowledge and they can generate useful contacts in your chosen field.
If the internship is successful, the intern could even gain paid employment after their internship.
The danger zone
Problems arise when companies treat unpaid interns as a source of free labour. They have no intention to train them or seriously consider them for a permanent job. This is called ‘churn’ culture; where unpaid interns are regularly replaced with a new batch.
Interns at these jobs often undertake high-volume process-driven or administrative work, or lower-value tasks that require minimal supervision and training.
Unpaid Internships: Your rights and the law
Australia has a rigid set of rules about how unpaid internships and unpaid work can be conducted in a workplace.
Both are legal in Australian workplace law, but there are limits. Unpaid work arrangements exist in law to allow someone to get experience or a person’s skills are tested before they are offered employment.
Fair Work Australia offers this clarification; Unpaid work experience, job placements and internships that are not vocational placements will be unlawful if the person is in an employment relationship with the business or organisation they are doing the work for.
How do I know whether an employment relationship exists?
There are a range of indicators that need to be assessed on a case by case basis. Key indicators are:
- An intention to enter into an agreed arrangement to do work for the employer,
- A commitment by the person to perform work for the benefit of the business or organisation and not as part of a running a business of their own, and
- An expectation that the person receive payment for their work.
Unpaid work is also classified differently. Understanding the type of unpaid work is important as it ensures you are not taken advantage of.
In a volunteer work situation, the volunteer is doing it for the benefit of someone else (e.g a local sporting club or charity). They have no expectation of the organisation paying for their time. However, the organisation cannot mandate a roster or set out any firm obligations for the volunteer.
Vocational placements (unpaid internships)
The goal of vocational and trades placements is to build the skills of the applicant so they are ‘job ready’. The person seeking the work or a third party can arrange placements.
Take a second-year nursing student, for example. The student must complete at least two weeks of work experience per semester at a hospital or medical centre in order to meet course requirements. Through her university, she organises a placement at a local medical centre. This scenario meets the definition of a vocational placement, and no work relationship exists.
Mark is a final year law student. He agrees to do an unpaid internship with a law firm that promises him a job once he graduates.
Mark attended the firm for 3 days a week. He prepared customer documents and the firm charged clients for the work he did.
Although Mark had agreed not to be paid, he did work that would have otherwise been done by a paid employee and his attendance kept to a regular schedule. This indicates an employment relationship existed. As a result, the firm should pay him for all the hours he worked.
Other types of work arrangements: unpaid work and trial periods
Where a position is not a vocational placement or part of a training or education course, it could in fact be an employment relationship. This is where it gets tricky as in some cases you may be entitled to payment as an employee.
The indicators below help to work out whether an employment relationship exists. In these cases, an unpaid work experience, job placement or internship is likely to be unlawful:
Reason for the arrangement
A work product being created is the first requirement. This might be goods (e.g. writing articles for an online travel publication) or services (e.g. answering phones and customer queries).
Length of time
Factors like the length of the unpaid internship and if there are any rules about rosters and attendance must be considered.
Who’s getting the benefit?
Finally, who is getting the main benefit from the unpaid work: the intern or the organisation?
Consider a recent school-leaver who is seeking a job at their local butcher. To check that he is suitable for the job, the owner tells the applicant he should be at the shop at 5am the next morning to observe how the ‘back of house’ works before the doors open. The owner mostly wants to ensure the applicant isn’t bothered by the sights or smells of the shop before he offers any further work experience.
In this example, the demonstration of being able to arrive on time and handle the workplace setting are a brief trial. They do not require payment and no employment relationship exists.
Next, consider a student who responds to a job opening at a nearby café. The manager tells her she has to do at least one shift unpaid to ensure she knows the food safety standards and how to use the coffee machine. After her first shift, the manager says there are two shifts she needs covered for the upcoming week, and that doing these will help the student’s chances of getting the job.
In this example, the first shift is to demonstrate skills, but any subsequent shifts indicate an employment relationship has begun. Therefore, the student is entitled to payment for that work at the appropriate pay grade.
Any earnings you make as a result of paid internships, paid work experience or any other job trials are part of your taxable income. If you need any more help, register your details with etax.com.au and private message or chat with our qualified tax accountants directly.
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