Interns and Employers: Who should foot the bill?

The demand for internships has soared as students hoping to gain employment in competitive industries become more concerned about job opportunities after graduation.

In a global labour market that demands real-world experience, students and even some parents, are going to astonishing lengths to land the perfect post-grad job.

A surge in interns paying for the privilege of doing an internship, has taken place in Australia and overseas. In America, some parents are paying employers up to $10,000 for a guaranteed place on the student internship program.

Closer to home, employers are also seeing the potential to charge a fee for work experience, with one Australian law firm recently asking students to pay AUD$22,000 to intern at their organisation.  The Fair Work Ombudsman is currently investigating the validity of the program.

Paid-for-internships aren’t just emptying the pockets of parents wanting to give their child a leg-up into the workforce, they are also making it impossible for the children of less-affluent families to secure internship opportunities.

Managing Director of Employment Office, Tudor Marsden-Huggins, says mutually beneficial internship agreements shouldn’t see money exchanging hand on either side.

“Employers need to be impartial when selecting candidates for internships. Right now students feel like they need internships to secure that great graduate opportunity.  Some employers are exploiting this situation and creating internships you can pay for as a revenue-raiser.

“Selection of interns should be based on merit as opposed to bank balance and employers shouldn’t take advantage by hiring students who can pay for the privilege over others,” he says.

“Internships are a great way for young people or university graduates to secure experience in the corporate world. They’re offered a taste of their chosen field and  an idea of whether they’d like to pursue what they’ve been studying as a career. The employer also benefits by gaining an insight into the talent of the emerging workforce.

“It costs an organisation a great deal of resources to properly mentor an intern but in return the employer receives an additional resource and potential future employee. A win-win internship agreement like this is hard to attain when one party is paying the other for the opportunity to be there,” Marsden-Huggins says.

To ensure interns are treated fairly, organisations must nurture their interns – mentoring and observing them rather than exploiting them for free labour.

A new law recently passed in France looks to protect students from being exploited as cheap labour. The law states “mentoring” must be provided to an intern and the internship mentor cannot mentor more than three students at the same time.

Luxury French fashion houses have come under scrutiny in recent years for exploiting the desperate interns trying to gain experience in the competitive fashion industry.  Some have been accused of taking advantage of unpaid interns and using them for ‘slave labour’.

In Australia the lines are still blurred, the Fair Work Act states employers must pay employees a minimum wage, so it can be argued if your intern is performing work someone would otherwise be paid to do you may be non-compliant.

There are exceptions for vocational placements and voluntary not-for-profit work, but with a grey area for other free-office work, employers should understand their boundaries before the Fair Work Ombudsman enforces them for a hefty fine.