You're approached by an ambitious student, or fresh faced graduate, bemoaning the tight labour market. It's impossible, they proclaim, to secure a role without some experience. And so they beg and plead for an unpaid internship or work experience. Initially you resist, explaining you don't have any available jobs. But they persist, you relent, and secretly you're filled with a warm glow for being so magnanimous and helping to launch this person's career.
But then enter, stage right, the Fair Work Act 2009 (Cth). The Act mandates that employers pay employees a minimum wage, with hefty penalties attaching to non-compliance.
So what, you say. An unpaid intern is a volunteer not an employee, right? Alas, it's not that simple.
Two leading Adelaide Law School academics have just completed a report to the Fair Work Ombudsman titled Experience or Exploitation? The Nature, Prevalence and Regulation of Unpaid Work Experience, Internships and Trial Periods in Australia. In response, the FWO has announced that it plans to audit allegedly high risk industries (health and beauty, hospitality and professional services) and to prosecute wrongdoers.
The problem arises where the line between passive observer, and active worker, starts to blur. The argument is that once the "intern" is performing "work", which someone would otherwise be paid to perform, they've tripped the line into employee status and should be paid.
There are some exceptions. A vocational placement, undertaken as a requirement of an education or training course which is authorised by a law or administrative arrangement, is not employment. So you're safe with your year 10 work experience kid. Voluntary work for a not-for-profit is usually pretty safe too. But beyond that, having someone in the office doing work for free – even at their behest – is potentially getting you into danger territory.
So now might be the time to audit your arrangements; before the FWO does.
Questions? Give us a call.