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Do you engage unpaid workers?

June 7, 2016

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Do any of your employees work for free as part of a volunteer or internship program?

If yes, you are at high risk of an underpayment claim.

So when is unpaid work legal?

  • Unpaid trial – an unpaid trial is lawful if it involves no more than a demonstration of the worker’s skills. This should generally be no more than an hour or so in length, or enough time for the employer to see if the potential employee possesses the skills for the job. If a trial spans over an entire shift, it is likely that the candidate should be paid for the time worked.
  • Vocational placement – a vocational placement is lawful if the placement is a specific requirement of a worker’s course (i.e. university course or high school work placement). The placement must be a requirement of a specific module or subject of a course as required by an educational institution. The educational institution must be ‘authorised under an Australian, state or territory law or an administrative arrangement of the Commonwealth or a state or territory‘ (Fair Work Ombudsman).
  • Work experience/internships – in order for a work experience or internship arrangement to be lawful, there must not be an employment relationship. What this means is, the worker should not be performing work for the company that would ordinarily be performed by an employee. If they are, they should be getting paid for their time.

Recent case

The Fair Work Ombudsman has ordered a Japanese fast food retailer in regional NSW to repay more than $51,000 to 3 Korean workers after exploiting them to come and work in Australia on an ‘internship program’ where they were paid flat rates of between $12 and $13.50 for all hours worked.

As well as ordering a back payment, the company and its director are facing penalties of up to $51,000 and $10,200 respectively.

The store owner organised for the 3 students to come out to Australia on an ‘internship’ arrangement which was not authorised under any Australian Law or administrative arrangement. The work the employees undertook was not a requirement of their college course.

This a strong warning for employers who engage ‘volunteers’ in their business that the Fair Work Ombudsman does not ‘go easy’ on those exploiting workers and contravening workplace laws.

For more information on unpaid work, clients should contact the HR Assured team. If you’d like more information about the benefits of becoming an HR Assured client contact us today for an informal chat.