By Sandra Rajendra, Employee Expert
Can I Hire Someone for Free?
Sure! You don’t have to pay someone in some instances if they are doing an internship, on work experience, on trial or a vocational placement (formal work experience as part of a course).
Someone may agree to enter into an unpaid arrangement if they want experience in a job or industry, to volunteer their time to a non-profit organisation or, in some cases, if they are willing to have their skills tested. In the case of volunteering, the individual does not expect to be paid – they can choose when they attend the workplace and what work they will perform.
Sometimes the individual will offer their services to gain experience and, in other circumstances, a business may be approached by an education or training institute – in some cases, employers may offer this option to people wanting experience (internship).
The safest approach to unpaid work is being approached by a training organisation, or you are offering work to someone who’s coursework requires it.
When do you pay someone for work experience?
To determine if you should pay someone you should consider the following points:
- are you directing them to do work for you?
- are you expecting them to work independently?
- do you profit or benefit as a business from the work they are doing?
If you answer yes to any of these questions, then the employee may be entitled to be paid the minimum rate of pay for the type of work they’re doing, along with minimum entitlements.
The Fair Work Act 2009 determines if an unpaid work arrangement is lawful, by determining whether an employment relationship exists. To do this they will look at:
- who benefits most from the relationship – is it the business or the employee?
- did the person assist with the ordinary operation of the business?
- did the business provide direction for the employee to complete a task, or was the employee just an observer?
For example, a business wanted to offer marketing work experience to students undertaking a marketing qualification. The hours were part time and flexible to fit in with the students study schedule. The students would decide when to attend the workplace. The intention was to provide the students with an opportunity to experience real marketing activities by giving them a project to complete during their work experience, which would be discussed and monitored by the Marketing Manager.
Should this be paid?
Considerations that took place to determine if this should be paid were:
- would the organisation benefit from the projects? Yes, possibly, the information provided may benefit the organisation
- did the students have a pre-requisite to complete this work experience as part of the studies? No, it was something they were willing to do on their own
- would the students be directed on what projects to do or would they choose their own? They would have some flexibility to choose what they wanted to look at within an area directed by the Company
- would the students be required to work set hours? No, there would be flexibility based on the students’ needs
In this instance, although it was an internship and the students would require a lot of support and direction, the work they did may still benefit the organisation and was not a course requirement. Therefore it was determined that it was better to pay the students for their internship under the minimum wage requirements of the relevant Award, as an employment relationship may exist. Other benefits, such as annual and sick leave, were also offered to ensure minimum entitlements under the National Employment Standards, and any applicable Award, were met.
To determine if an employment relationship exists the following should be considered:
- what was the reason for arrangement? Was it only to provide a learning experience, or did the person help with the day to day work of business? Did the person do productive work or were they just learning, training and developing skills? If the person helped with day to day activities or tasks then it could be considered an employment relationship
- the length of the arrangement could make a difference, but even short periods can be considered an employment relationship
- is the work the person doing normally done by someone that would be paid? Does the business normally need this type of work done? The more relevant the work is to the business, it’s more likely to be an employment relationship
As a general rule, it is safer to hire and assess someone whilst they are paid during their probation period, unless it is very clear that it is not an employment relationship.
More information can be found at fairwork.gov.au website.