Setting Up A Virtual Internship? Here’s What You Need To Know

With many businesses moving online, you may have considered setting up a virtual internship. Internships generally provide the intern with valuable work experience but, as a general rule, any intern significantly contributing to your business should be paid.  

As an employer, it’s important to know about the nature of your intern’s work and their legal entitlements before you set up your virtual internship. 

Do I Need To Pay My Interns?

Generally, yes. Interns who perform similar work to employees, and provide value to the business, will be considered employees and are entitled to minimum wage. 

Essentially, as long as there is an employment relationship, you will need to pay your interns for the work they’ve done. 

Are There Exceptions?

Yes. In New Zealand, you don’t have to pay your interns if:

1. The intern is a student involved in a recognised educational training programme or work experience as part of their studies, or
2. There is no employment relationship

Unpaid internships that fall under these exceptions are lawful because they are not considered to be an ‘employment relationship’.  

How Do I Know If An ‘Employment Relationship’ Exists?

It’s important to consider whether your intern is doing work that a paid employee would normally do. This includes any work that delivers value to the business, and not just work experience. 

To help you determine whether this becomes an employment relationship, you can ask yourself the following questions.

What Did You Both Agree To?

An employment relationship exists where both parties agree that the intern:

• Agreed to work for the business as an employee
• Agreed to work for the business’ benefit
• Believed that they would be paid for their work

It’s important to have an Internship Agreement in place to legally set out these arrangements. This agreement should clarify that the position is voluntary, and will benefit the intern by providing work experience. 

An Internship Agreement will cover:

• The nature of the internship
• Terms
• Roles/responsibilities
• Confidentiality
• Intellectual property
• Indemnity

As the employer, having an Internship Agreement will clarify the nature of your intern’s employment with you. It will clearly set out their entitlements, responsibilities and obligations, and can be adjusted to accommodate work from home arrangements. 

What Was The Reason For Your Arrangement?

It’s also important to determine the overall purpose of the internship. If the arrangement is for gaining work experience, it may not be an employment relationship. 

However, if the arrangement is carrying out work that would significantly benefit the business, then it is an employment relationship. 

How Long Was The Arrangement?

The duration of the arrangement also matters. The longer someone is with the company, the more likely the intern is an employee. 

How Important Was The Intern’s Work To The Business?

If the intern does work that is significantly beneficial to the business, or something that a paid employee would usually do, they are likely to be considered an employee. 

What Work Is Your Intern Doing?

An intern who is required to perform tasks productively at work, and as part of day-to-day activities, is likely to be considered an employee. 

Who Is Getting The Benefit?

If the business is benefiting from the work of the intern, then that intern is an employee. 

Once you have considered all of the above questions, you can determine whether your intern is an employee or not. 

If there is an employment relationship, accompanied by an employment contract, then the intern is entitled to minimum wage and other entitlements under New Zealand law. You can read more about paid/unpaid internships here.  

What Else Is An Intern Entitled To?

All interns are required to have medical, accident, travel and personal liability insurance during their internship. Paid interns are considered employees and, as such, the employer’s professional indemnity and public liability insurance covers their work placement. 

The intern will also need an employment contract. This entitles them to:

• Minimum wages
• Working conditions under the Employment Relations Act 2000 and Holidays Act 2003
• Conditions of the related employment agreement 

How Do Internships Work Remotely?

Setting up virtual internships may be more convenient for both you and your interns. But this means that separate arrangements must be made to ensure everything still runs smoothly online.

According to WorkSafe New Zealand, your duty of care for the health and safety of your employees still applies when they’re working from home. Interns are considered workers under the Health and Safety at Work Act 2015, so employers need to be sure their working environment complies with these laws. 

This means you should have a policy in place to ensure your interns report to you regarding workstation checklists or any injuries incurred. You might also consider:

• Guiding interns on how to set up a safe workstation
• Requiring interns to complete a workstation checklist
• Allowing interns to borrow equipment from the office
• Requiring interns to report any injuries or hazards 
• Discussions with interns about their work setup and mental health

As an employer, you still have this duty of care for your intern’s safety, even where the internship is entirely virtual. You can read more about your health and safety obligations to your interns here. 

How To Get Started

If you’re thinking of setting up a virtual internship while working from home, feel free to reach out to us at [email protected] or contact us on 0800 002 184. Our legal consultants are available for a free, no-obligations chat to walk you through your options.

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