Should you hire an intern under the government’s new scheme?

This year’s budget brought news of a new internship program: up to 120,000 paid placements for young people over the next four years.

So is this something that could benefit your business?

The details

In a nutshell, the new internship program looks like this:

  • Young people need to have been using employment services for six months or more to access the program.
  • Businesses and jobactive providers work with the intern to design a 4-12 week program.
  • The intern works 15-25 hours per week, receiving $200 per fortnight on top of their usual income support.

Employers who take on an intern get an up-front payment of $1000 and, of course, the option to offer an ongoing position when the internship ends.

Some reacted with outrage over the perceived low pay rate, while others applauded the news. What does it really mean for your business?

The benefits

Aside from the initial cash boost, hiring an intern offers solid benefits to businesses, the biggest being the ability to ‘try before you buy’.

Over the length of the program you get the chance to see whether your intern can do the job and observe how they manage company culture. At the same time, your intern will also be testing the waters, which means if they take up a job offer you know they’re likely in for the long haul.

Even if you’re not able to offer an ongoing position, there are obviously short-term benefits – a low cost resource, and a step towards corporate social responsibility goals.

The downside

People considered to be in an ‘employment relationship’ with a business are entitled to a minimum wage and conditions that meet National Employment Standards. Any awards or registered agreements also apply.

This may not be an issue for interns paid under the new scheme (as long as their income support plus the additional $200 per fortnight are at least equal to the relevant minimum wage). But businesses can run into trouble with the Fair Work Ombudsman if an unpaid or underpaid intern is seen to be doing the work of an employee.

So how do you know if your intern might be considered an employee? Look at these areas:

  • Reason: Is the arrangement primarily and genuinely to provide the intern with work experience?
  • Length of time: Generally, the longer the intern is with you, the more likely it is they’ll be seen as employee.
  • Significance/type of work: Is the intern taking on a lot of work that would otherwise be done by an employee? Are they being relied on to complete essential tasks
  • Benefit: The intern should be getting the main benefit from the arrangement, not the business.

While there are things to consider before taking on an intern, it can be a great opportunity to showcase your business, future-proof your talent pool, and give back to the community.

 

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