Interns and Your Business - What You Need to Know
21 August 2014
Formal internships are a relatively recent phenomenon in Ireland. In certain industries, however, and most prominently in tech and media, internships are already seen as the primary way for individuals to gain relevant work experience and to increase their employability in a competitive working environment. For businesses, internships are often a reliable and effective way of accessing talent.
The difficulty for both businesses and interns in Ireland is that internships are unregulated here – there is no legislation governing such relationships. Unlike in the United States and the United Kingdom, no governmental guidance has been provided in Ireland to ensure minimum rights and obligations of the parties.
Key concerns for businesses are whether or not the intern is an employee of the business and whether the intern is entitled to be paid during the internship. We address these concerns and set out our top tips for businesses engaging interns.
What is an intern?
Under JobBridge, the National Internship Scheme, an intern partaking in the scheme is specifically considered not to be an employee. Internships outside of the scheme, however, do not benefit from any such legal certainty.
Under Irish law, there is no legal definition of an intern. As internships are unregulated, one intern’s experience can vary greatly from that of another. In general an intern will spend time with a business for the purposes of learning about the day-to-day running of the business and the type of work the employees engage in. While some interns will be given specific work to carry out, other interns might only be given an opportunity to shadow employees in the business.
Businesses should be aware that, depending on the type of work carried out by an intern, and the reality of the day-to-day relationship between the intern and the business, there is a risk that an intern could be deemed to be an employee by an employment tribunal or the courts. In such circumstances, an intern would be entitled to the extensive legal protections and rights afforded to employees under Irish law. Such rights include an entitlement to be paid the national minimum wage, a cap on the number of daily and weekly hours that can be worked, annual leave and a statutory minimum notice of dismissal.
In assessing whether an intern is an employee of the business, a number of factors will be considered, such as:
- the extent to which the intern is integrated into the business;
- the level of control exercised by the business over the intern; and
- whether there is an obligation that the business provide work for the intern and whether the intern is obliged in turn to perform such work.
It is worth pointing out that tribunals and courts will look beyond any label put on the relationship by the parties. Instead, they will focus on the reality of the relationship in practice, before determining whether or not it should be classified as an employment relationship.
Should interns be paid?
Whether or not an intern should be paid will depend on the nature of the activity carried out by the intern. The National Minimum Wage Act 2000 (the “NMW Act”), obliges employers to pay employees who are engaged under a contract of employment the minimum wage, which is currently €8.65 per hour.
A contract of employment under the NMW Act is defined to include a “contract whereby an individual agrees with another person to do or perform personally any work or service.” There is no requirement that the contract be in writing. Businesses should therefore be mindful that if an intern is doing work of value for the business, and has a similar level of supervision and responsibility as the rest of the workforce, the intern may assert a right to be paid the national minimum wage.
However, where an internship is purely educational, or where the intern is only, for example, shadowing other employees in the business, the issue of payment is less likely to arise.
In all circumstances, and at the very least, an intern should be reimbursed for reasonable expenses incurred during the internship.
If a business wants to engage an intern on an unpaid basis in Ireland, it is advisable that the internship is short and predominantly educational in value. It should be of benefit to the intern. Further, the intern should not replace regular employees and, perhaps most importantly, the employer should ensure that the intern clearly understands and agrees in advance that the internship is unpaid.
Top Tips for Businesses Hiring Interns
Although there is no legal obligation to put in place an internship agreement, it is a useful way to clearly set out the duties and obligations of the business and the intern. The internship agreement should specify the activity that the intern will engage in, the duration of the internship, payment (if any) and/or expenses, and should be signed by both parties. It is important that the internship agreement clearly states that the intern is not an employee of the business although, as pointed out above, employment tribunals and courts will look behind any label put on the relationship to the reality of the relationship between the business and the intern.
The business should give the intern induction training which introduces the intern to the relevant policies and procedures of the business. While not an employee, the intern should be told that he/she is expected to comply with any established policies and procedures in the workplace.
In particular, the business should be aware that its obligations under health and safety legislation extend to interns. If the business takes on interns regularly, it is recommended that reference is made to interns in the business’s risk assessments and safety statements.
3.Protect Confidential Information
For many interns, this may be their first time working in a professional environment. Therefore it is important to explain to interns what confidential information is and the extent of their obligations to protect such information. In a society where the online sharing of many aspects of people’s daily lives is commonplace, a business should not underestimate the value of comprehensively addressing the protection of confidential information at the intern’s induction.
The intern should also sign a document confirming that he/she will not share or use any confidential information learned during the course of the internship. This document should clearly state that such confidentiality obligations extend beyond the termination of the internship.
4.Protect Intellectual Property
Finally, the business should ensure that any intellectual property created by an intern during his/her internship is protected and that the business asserts ownership over any such intellectual property. The business may wish to insert a clause to this effect into the internship agreement or alternatively, it may wish to have an intern sign a more comprehensive intellectual property agreement.
Further detail on the protection of intellectual property created by interns is provided in part 2 of this post.
If you wish to discuss any of the information provided here, you can contact the authors, Elizabeth Ryan, Partner or Sarah Lawn, Associate in our Employment Law and Benefits Team or your usual contact in our Commercial Team.
The content of this article is provided for information purposes only and does not constitute legal or other advice. Mason Hayes & Curran (www.mhc.ie) is a leading business law firm with offices in Dublin, London and New York.