For many startups hiring interns makes a lot of sense – they’re super enthusiastic, full of new ideas, and come cheap.
But engaging interns also comes with risks, especially on the legal side if you don’t know what you’re doing, with a number of Aussie firms recently falling foul of workplace laws.
With that in mind, we spoke to LegalVision employment lawyer, Edith Moss and HR specialist Kate Brown about how to make the most of interns, legally.
Be up front about the purpose
A top tip, LegalVision’s Moss says, is to put procedures in place to protect yourself legally like ensuring you have a written intern agreement.
“If you bring on an intern, make sure that you have an intern agreement setting out your relationship, their role, the obligations on both parties. Avoid the trap of falling into an informal intern agreement,” Moss says.
You should also clearly indicate that the role is unpaid and that it’s for a specified period, noting that, if possible, it’s best to bring interns on via TAFE or university courses.
At all times it’s critical to remember that an intern does not replace an employee, Moss says.
“An internship should be a worthwhile learning experience, offering the intern access to mentors and skill development. They cannot be responsible for one aspect of the startup's operations/business.”
“An internship should be a worthwhile learning experience, offering the intern access to mentors and skill development."
Get the relationship right
Moss says many startups that get into trouble make similar mistakes such as getting an intern to work like they’re an employee or neglecting health and safety obligations.
The employment lawyer says it’s critically important to abide by the law because of the stiff penalties imposed for breaches.
“If a startup founder is found to have engaged interns, but the relationship is in fact employee-employer, they will be liable for back pay and other employee entitlements. The Business could also face fines of up to $54,000 for each breach of the Fair Work Act,” she says.
The easiest way for startups to avoid falling foul of the law, she says, is to have a good internship agreement template, ensuring that when the intern starts “you can fill out their role, learning aims and both parties' obligations together”.
“If you are unsure about the nature of the relationship, always ask before the intern begins their placement,” Moss adds.
“If a startup founder is found to have engaged interns, but the relationship is in fact employee-employer, they will be liable for back pay and other employee entitlements."
Brown, from Raise the Bar HR, says getting value from interns is, like most hires, about choosing candidates with aptitude and the right cultural and technical fit.
Once on board, Brown says you should carefully consider the tasks you assign to interns.
“Being clear about the expectations at the outset – the type of work and tasks, the level of exposure and training as well as the culture of the organisation will set you up well for success,” Brown says.
“Also think about an effective on-boarding process to make the intern feel part of the team from the outset.”
Carefully consider the tasks you assign to interns.
Consider paying a wage
While many startups opt to go down the unpaid route, Brown says that can be false economy.
“Do not discount the thought of paying a salary to your intern, even if it is minimum wages,” she says.
“In many businesses an internship is a pipeline for full-time employment, and businesses with paid interns are twice as likely to convert these into full-time staff. You are also much more likely to receive higher quality applicants for your internship.
“By paying your interns you will be more legally secure in assigning them meaningful work that impacts the business and your intern will be more likely to secure the experience needed to make them more effective staff.”
Sam McKeith is Sydney-based media professional. He has contributed to many leading publications including The Huffington Post, The Australian Financial Review, The Australian and BRW Magazine. He was previously a senior reporter at the Australian Associated Press where he covered national affairs.