Intern or employee – what’s the difference?

Bootstrapped startups are often challenged to afford suitable resources. I’ve often encountered what appears to be a common trend, where hiring an intern appears to provide a solution as most are unpaid.


Hiring a student through a vocational placement program can be great; it can have some drawbacks though. Most students have a learning and development schedule that they need to meet as part of the internship. Managing a student through a placement can be quite time consuming. It may be better to avoid placements unless you intend to give a student real work experience related to their studies. You may spend more time managing an intern on placement than someone hired for a specific role. If you have the task of managing an intern’s workflow, remember work experience isn’t getting them to do the s**t jobs that you don’t want to do.


Many startups engage interns or volunteers without understanding the possible pitfalls. If you are planning to hire an unpaid intern or volunteer it’s important that you are aware of current legislation.


If the internship is not part of a vocational placement you will need to assess the employment relationship. There are various indicators that you may need to consider. These include reasons for the engagement, the length of the engagement and the work that the person will do. If the benefit of the engagement is that of the business then it’s more likely the person would be considered an employee. For more details and examples, check out the Fairwork website.


Failing to comply may land you in hot water. There have been several cases in Australia recently, where interns should have been paid the minimum wages.


Either way, paid or not, both interns and volunteers should sign an agreement with you. Note; this agreement also needs to provide protection for your company’s intellectual property (IP). That’s a whole other post; I’ll cover that one another time.


More related reading:


●     Examples of unpaid internship verse a paid internship on the Fairwork website;

●     Fair Work Ombudsman report finds unpaid internships disadvantage poorer jobseekers; and

●     PRIA (Public relations institute of Australia) intern guidelines.


Clare Hallam is a Startup Operations Specialist. Follow Clare on Twitter.


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