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In recent days when I was in casual discussion with couple of my friends, they were claiming that they are engaging interns who has completed their academics to perform their duties along with other employees. They have been paid stipend and was working for the period varying 6 months to 1 year which I could see very commonly in various industries engaging the interns such as IT, Service Sectors, Manufacturing etc. Such interns are being engaged small, medium and large organisations without knowing the impact on the on compliances.

Many of the organisations are engaging interns or trainees for short term projects to avoid paying minimum wages, social security benefits and few companies engage interns or trainees for around a year post that they are onboarded on the company roles.

Following are some of the points to be considered on engaging the Interns.
Who are Interns?
Indian Labour or employment law doesn’t define the term of Interns and the real meaning of the interns are the students who are part of academics may be technical or non-technical and part of their curriculum they will be engaged in any of the organisations to get exposure on the job skills and it all depends on the course that they are studying. This shall not be applicable to the persons who completed their course.

Can companies engage interns in organisations?
Yes, companies can engage the interns as mentioned above. Such interns shall be engaged as per the terms mentioned in their curriculum only.

Is a stipend mandatory for interns?
As the students are gaining the skills from their program it is not necessary to pai stipend but still it is advisable to pay the reasonable stipend and shall have detailed policy.

What are the check points to be ensured while engaging the interns?
• Check whether the person approaching for intern is studying in any authorised institutions.
• Shall mandatorily have the signed internship request letter from the authorised person from the institute with the duration and purpose.
• Collect the resume with the copies of address proof, ID proof and educational certificates.
• Provide necessary On the Job Training wherever possible and record the same.
• Post completion of the internship provide the certificate and have a copy for document evidence.

Following are the legal/compliance considerations for engaging the internships.

As mentioned earlier, interns are not recognised under Indian labour laws. Hence, such arrangements may carry misclassification risk. For example, depending on the nature of arrangements, interns may be considered as employees/workers as per the respective acts thereby high possibilities of triggering the applicable labour law benefits, social security benefits, compliances, and protections if we are not following the right practices.

EPF department issued two circulars which is related to the same topic as student-trainees on No. Coord./40(5)20 15/Misc./clarification/27308 Dt. 12 Oct 2028 as well as the detailed clarification cum guidelines on 26 July 2022 against the file no. Compliance/TrainingSchemesUnderStateGovt/2021-22/9503, this has reference to the above notification as well. These circulars have clear guidelines which promotes trainees as well as the internships but should follow the guidelines and any deviation may lead to non-compliances which subsequently may relate to employee and employer relationships followed by the necessary compliance such as Minimum wages, social security benefits etc.

If any of the organisations want to engage the interns, then better to engage the students who are part of the academics else there is alternative option which government is promoting training scheme under Apprentice Act which includes NSDC such NAPS as well as NATS. It is mandatory to Engage NAPS/NATS if any organization has employee strength of 30 more and of the employee strength is less than 30 still there is provision to engage NAPS/NATS. Under both the schemes employer can pay the stipend for trainees and even government is supporting their share based on the employee qualification and, they are excluded from the labour laws.

Be compliant with applicable labour laws and be risk free.

From India, Bangalore
Dinesh Divekar

Dear Mr Jeevarathnam, Thanks for sharing the article that educates on internships. Thanks, Dinesh Divekar
From India, Bangalore
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