Thinking about hiring interns? The disadvantages of unpaid internships ❌

Copied to clipboard

Many companies in Australia and worldwide offer the opportunity for graduates to do work experience.

Graduate internships and work experience can be a great way for employers to gain some extra hands during busy periods as well as being helpful in finding potential future employees.

It also helps employable graduates who are struggling to find a job to boost their career options.

At Give A Grad A Go, we believe that all interns and placement students should always be paid.

With young workers accounting for 15% of total employment and more than two-thirds of Australian workers holding post-school qualifications, finding a career in Australia can be competitive.

This might be the reason why many employable graduates hoping to find work are accepting unpaid internships in Australia.

The unpaid internships law has never sat well with us and we will continue to advise companies that they should be paying interns and graduates, regardless of the role they have been hired for.

We also help employers by providing graduate salary statistics, along with recommendations on the salaries we believe they should be paying, to ensure their latest graduate hire feels valued in the role and part of a team.

We pride ourselves on matching the graduates we work with to paid graduate placements that they deserve.

Since launching our recruitment services in Australia, it has been surprising to discover that many graduate internships in Australia are unpaid.

Hiring interns or hiring graduates for a vocational placement makes it very difficult for graduates, and in some instances can be unfair.

If a graduate is unable to fund themselves through unpaid graduate internships, then they will be at a disadvantage to other graduates’ from more wealthy backgrounds.


Our country manager in Australia, Camilla Clarke explains:

“Since landing in Australia last month, I have absolutely loved getting to learn more and more about graduate internships, work experience and graduate life here and the exciting growing companies, eager to build up their teams by hiring graduates.

However, I have been sad to hear the unpaid placements and internships issue is not limited to the UK, with some agencies in Australia even making the graduate pay for their internship?!

It is something that we have happily seen diminish in the UK market thanks to internship laws and internship contracts, so I just hope that trajectory continues here to ban unpaid internships.

It only makes me more determined to work with great companies and launch as many early careers as I can within some truly exciting teams and on a fair and well-deserved wage for all work experience, graduate internships and permanent roles in Australia.”


Many graduates may get tied into an internship contract without looking at the internship laws or looking into whether unpaid internships are illegal.

Meanwhile, there are still many employers who are unsure of the facts too.

The definition of this can be unclear, so we decided to pull together some of the basic facts about unpaid internships and unpaid internship laws in Australia.


Paid vs. unpaid internships

Unpaid internships statistics: A study in Australia showed that 1 in 4 respondents reduced their hours of paid work to participate in unpaid work experience, 1 in 5 paid for their own insurance and 1 in 10 paid money to a broker, agent or directly to the organization.

These interns are often needing to pay for rent, food, travel and general living at a minimum.

So, even if they do not need to pay anything to do the internship, they will still end up out of pocket.

Despite the substantial costs, young people are still applying in the hope of getting their foot in the door.

It has been suggested that this stems from tighter labour market. If there were sufficient jobs, then graduates would be able choose their occupation without having to work for free first.


Disadvantages of unpaid internships

  1. Unpaid interns are likely to feel less motivation to work hard
  2. The intern will often still have to pay for their own travel expenses, meaning that not only are they not getting paid, but they are also actually having to pay themselves.
  3. It puts employees who don’t agree with unpaid internships in an awkward position.
  4. It can give your company a bad reputation.
  5. Unpaid interns are less likely to recommend the company, or choose to apply for a perminent position after the internship is completed.


When are unpaid internships allowed in Australia?

  • You’re in Education: If you’re a student or on a vocational placement when you are allowed to take part in an internship unpaid.
  • Employment Relationship: There is no obligation to pay minimum wage if there is no employer relationship.
  • If the work is productive: The person undertaking the work cannot be doing ‘productive’ work that could otherwise be done by an employee.
  • If there is a benefit of the work: The person taking part in the placement should be gaining the majority of the benefit from the arrangement if they are not being paid. It also must be made clear from the company and they are receiving a meaningful learning experience, training or skill development.
  • Volunteering: If the individual is volunteering then you do not get paid for your work


Australian unpaid internships are not allowed when:

In Australia, the law for minimum wage is highly dependent on the employment relationship but what constitutes as an employer relationship?

It is a matter of working out if the nature of work involves an employment contract, which can create a blurred line on unpaid work, as this contract does not need to be written and can be verbal.

For the contract to exist, the following must be clear:

  1. Both parties are intending to create a legally binding arrangement
  2. The work performed must be intended and committed to benefiting the business or organization
  3. The person working must get something in return. This does not have to be financial gain and instead can involve gaining experience or training.
  4. The person performing the work cannot be doing so on behalf of a business of their own.


If these four boundaries of the employer relationship are agreed too, then unpaid internships are allowed. If they are not, then the unpaid internship is not allowed.


If you’re interested in hiring paid interns or graduates, then get in touch with us today using the enquiry form below! Or find out more about our Recruitment Services on our website.


Get in touch

Revolutionise your hiring process.

Let us know your requirements and we’ll build a plan tailored to your needs.


    PhoneSchedule video call via emailEmail
    Was this post useful?