TLDR: Please reblog this post for your aussie followers, so they can learn about what sorts of internships should be paid or unpaid in Australia.
If you’re reading this you’re probably a young person. And you need to know that some types of unpaid internships are unlawful in Australia and so many people do them unknowingly. Unlawful unpaid internships are extremely common in some industries, such as tech, but they can appear anywhere. I know this is a long post but you need to know this stuff. If you don’t have the time to read this right now, then like it / bookmark it / or open it in a new tab for a rainy day.
Businesses and organisations (I’ll just use “businesses” from now on) get away with unlawful unpaid internships because young people don’t know their rights. So I’m here to tell you about them.
Here’s how it works fam. If you are in a relationship with a business (as in, it’s expected that you turn up sometimes and do things that involve the operations of the business), then you must benefit from the relationship in at least one of the following ways:
money. All the typical minimum wage/award level/overtime/on call/etc rules apply. You are also entitled to be paid for any mandatory training (like a 1 day induction or a half hour training video).
course credit/vocational placement. If work experience is a compulsory part of an education program/course/etc then fulfilling the requirements of the course is considered as a sufficient benefit to you.
training/experience. If your primary role at the workplace is to receive training and/or experience, then that is a sufficient benefit.
Exceptions which I won’t be discussing in this post but will refer to when I use an asterisk (*) :
Certain types of arrangements that involve government benefits and Commonwealth employment programs.
A lot of rules flat out don’t apply to business owners - like the fact that they aren’t even entitled to any pay at all for work they do for their own business.
Among the different types of relationships you can have with a business, the one that matters is if it is an “employment relationship”. If you are in an employment relationship with a business then you must be compensated monetarily*, otherwise it is unlawful. If you benefit from the relationship through course credit and/or training/experience, then that is not considered an “employment relationship” and it is typically lawful for you to not receive pay.
The way that businesses try to cheat the system is by convincing you that you are not in an employment relationship. They do this by claiming that simply by working for them you are learning - which means you are benefiting in the “training/experience” category. Hence not an employment relationship right? WRONG. You get training and experience on most jobs - and most jobs (and even mandatory training sessions) are paid aren’t they? Use your common sense here people!
What matters is the “productive work” you do on the job. If you are doing a task that a paid employee would otherwise be doing, or is essential to the running of the business, then that is considered “productive” by the Fair Work Ombudsman. Essentially, productive work = benefit to the business.
Work that isn’t considered productive would be things like observing, learning, skill development, and training. However it’s important to remember that a bit of productive work as part of training is okay, and even expected - but it should be incidental to the training, and the productivity for the business should not be the goal. There are also other things to take into account, such as the length of the proposed relationship, if the employee/intern is obligated to work at particular times, and more.
Ultimately, it’s a case by case basis sort of thing, but a good rule of thumb that the Fair Work Ombudsman uses is to see who really benefits from the relationship. Consider how much benefit the business is receiving through your productivity vs how much you are receiving through learning and experience. There isn’t a clear line in the sand, but if the business is receiving more benefit than you, then it is an employment relationship and you should be paid*.
TLDR: If you are in an employment relationship with the business (as in, you are primarily doing productive work for the business), then you are entitled to pay, as well as all the usual rights that workers have in Australia.
Now that we have a good idea of what is and is not an employment relationship, let’s go through some trouble shooting:
What it if seems like an employment relationship, but my supervisor/boss/employer is calling it an unpaid internship? It doesn’t matter what your employer calls your relationship. If it quacks like an employment relationship, then that is what it is regardless of the words they use or contracts you’ve signed.
But I signed a contract saying I agreed to not be paid, does this mean I waived my right to monetary compensation? NO! Not compensating you for work in an employment relationship is unlawful and no contract is going to change that.
What if I didn’t sign any contract or agreement at all? It doesn’t have to be a formal paper-on-the-table document for it to be considered a contract. In fact, it doesn’t even have to be in writing for it to be a contract. Even verbal agreements are valid, albeit a bit tricky to prove. As a side note, it’s a bit of a red flag to not have any written agreement for a job (other than one-off informal work) - so you may want to look into how they’re handling your superannuation and taxes.
But they said if I do well then I’ll get a paid position at the end of the unpaid internship. So? Understand that you are not guaranteed to get that paid position. And even if they signed an agreement saying so, they still need to pay you for your “internship” if it is an employment relationship. Offering a job at the end doesn’t magically make the unpaid work lawful.
But it’s a start up - they don’t have much money now but they say that the start up will get really big and I could earn a lot of money! This is alarmingly stupid but I wrote it in here just in case. Firstly - this is not a guarantee that you will get any of that money. Secondly - even if they wrote up a contract saying you will get paid this much money on this date, start ups are incredibly risky and if it fails you may not end up being paid at all (yes, even if a business agrees to pay you, there are legal ways they can get out of it if the business fails). Thirdly - start ups are still businesses/organisations, the only difference is that they’re new. The rules aren’t suddenly different. Unless you are one of the owners (definition is tricky) of the start up then you are entitled to payment*. Also, if they don’t have enough money to pay an intern minimum wage then can you really trust them to make good financial decisions and do well as a business? Stupid stupid.
Are unpaid trials lawful? Some are, some aren’t. This seems like a tricky question at first, but it just needs a bit of common sense. I’ll use an example. If you are being interviewed for a job as an experienced barista, it makes sense for you to be asked to make a coffee for the interviewer on their machine so they can see if you’re competent - that’s fine and does not require payment - you didn’t provide a benefit for the business. However, working a 5 hour shift making coffees for customers to show you can “handle the pressure” does require payment - you provided a benefit for the business by serving those customers and you did work that another employee otherwise would have done. So the rule of thumb for trials: if it’s a short test and doesn’t provide any significant benefit to the business then it can be unpaid. If it’s longer than the time it takes to complete a few tasks and you do provide a benefit to the business, then you must be paid for your time. But keep in mind, trials are not to be confused with training. Trials are to see if you can do the work. Training is to show you how to do the work and operate safely in the work place.
Is unpaid training lawful? If it’s an employment relationship, then you are entitled to monetary compensation for any compulsory training you undertake for the job. Watching a half hour long compulsory training video requires payment. Walking around the workshop for 2 hours with the manager as they show you the ropes and give a safety demonstration requires payment. If you’ve already been employed by them for a while and you need to complete an hour long refresher course, that requires payment. If it’s necessary for the job then it requires payment.
They said I will get paid on commission and work my own hours, and I can do it all from home! TANGENT TIME! Please be careful about offers like this. Multi-Level Marketing businesses (MLMs) are scams that use offers of flexible work hours and large amounts of money from commission to lure desperate people into their scheme. They will try to use every trick in the book to get you to turn up to their hiring sessions, and then use high pressure sales tactics to get you to sign up. The reason they are dangerous is because the vast majority of “employees” in MLMs do not make any money at all. In fact, most actually lose money. The job is based on buying a product from the company, and then reselling it to friends and family. The product is typically semi decent but overpriced, to make it seem legit (examples are knives, clothes, makeup, essential oils, shakes, etc). But it’s actually very difficult to make a livable income just reselling the product, so the “employees” refer their friends and family to the company so that they will sign up too. If someone you referred signs up, you get a slice of their pie - which is how “employees” actually make money at the higher levels (the very very small percentage of all “employees”). By selling products and referring people they are “promoted” to different levels with silly names like “Diamond” and “Gold”. But to stay at those levels you need to keep up with the amount of sales. This is how people lose money - they buy more of the products from the company so they can meet their quotas, but they don’t end up actually selling it to real people. Some don’t even manage to sell the initial stock they had to buy just to get into the business. Many people who fall into MLMs end up sending marketing messages to every person they know just to reach their quotas, meaning they lose a lot of friends. There’s a large amount of brainwashing involved, so just do not even consider it.
Okay, so it turns out that I am in an employment relationship with a business and they are not paying me. What are my options? You can report the business to the Fair Work Ombudsman at their website. You can confront your employer about the issue. You can cease working for them. You can seek legal advice. You can do nothing.
What will happen if I report them to the Fair Work Ombudsman? If you are successful, you will receive fair pay for all the time that you worked. The business may also face fines, including a fine for every single day that you worked unpaid. You personally will not receive any legal repercussion or fines. You can find out more about this on the Fair Work website.
Will the business fire me if I report them? Reporting your employer to the Fair Work Ombudsman wont make your employer happy with you. Most likely it will result in the termination of your employment in the near future if they know it was you who reported them. The business will probably try to do it in a legal way (such as just letting your internship run its course), but it’s best to check the Fair Work website to see what they are allowed to do in your situation. Ultimately, if you decide to report them then you shouldn’t expect continued employment from them, or even a reference on future job applications.
I already completed the internship a few months ago, and have just now realised that I should have been paid. Can I still report them? Yes.
I was just offered an unlawful unpaid internship, and I know it’s wrong but I’m just too desperate for experience! You need to seriously consider if this internship is your only opportunity to further your career. It may seem like that at the moment, but it is rarely the case. Please please, resist accepting unlawful employment. Not only are you allowing yourself to be exploited, but it shows the employer that they can get away with it and other people will be exploited too. Additionally, if they are willing to engage in unlawfully not paying their employees, then they’re more likely to be engaging in other unlawful activities. You don’t want to work for a business that wont fairly compensate their employees. However, if it really is your last resort then I don’t blame you and you’re not a bad person. You could try counter offering, but I doubt it would be successful. You could try politely explaining that their offer is unlawful, and give them the benefit of the doubt, but I wouldn’t bet on that leading to a paid internship. If it was me, I would reject the offer and let them know that it is because it is unlawful.
I’m unsure if my unpaid internship is lawful or not. I need more information! As mentioned, you can check the Fair Work website, where you can read more about this stuff, and contact them if need be. Another option is to make a post on the AusLegal subreddit, and you can get advice more specific to your situation. Just remember to read the rules of the subreddit before posting, and understand that any replies to your post are not a substitute for legal advice - just like this tumblr post!
The best thing you can do is make sure all your friends know about their rights as a worker in Australia. Have a fun discussion with your friends about the law, and send them a link to the fair work website. The more we can educate everyone about their rights, the more we can eradicate the unlawful unpaid internship culture.
