Internship Duration Dilemma: Are There Legal Risks in Keeping Interns Long-Term?

Internship Duration and Legal Concerns

How long can we keep interns as part of the organization in the same capacity? I understand the background of why a company hires interns, what interns are for, and when they need to be hired, etc. The issue is that I just joined an organization, and it looks like they have interns who have been doing their internship/projects for 12 to 16 months. Are there any legal concerns/issues that might arise? What is the maximum period to have interns work as interns (I know it's not right as they are working)? If so, what are the concerns? Pointers would be of great help.

Companies can have approximately 10% of their employees as interns. The internship period is a maximum of 6 months, after which the interns must be absorbed onto the payroll or let go.

Where did you get these figures and period from? Who says that an internship can be for only 6 months?

Dear Ms. Hema,

Please clarify under which:

1. Statutory Compliance/Act, e.g., Apprentice ship Act/Graduate Trainee Scheme, 10% and 6 months are applicable.
2. Previously, ITI Principal/Technical Graduate Apprentice were notified. Now, this practice is still ongoing.
3. How much stipend is required to pay per month?
4. What registers need to be maintained under this?
5. Reports and returns need to be filed with which authority and within what duration.

I would be grateful for your assistance.

Regards,

There is no legal provision for an internship, nor any restriction against it. There are specific provisions only for apprentices. Under the new NEEM scheme, you can employ trainees for up to 3 years without statutory deductions of PF and ESIC.

Internship Concept and Misuse

The original concept of an internship, still followed in foreign countries, is what we call management trainees. It's generally for 12 to 18 months to let the intern learn the workings of the corporate world or to acquire specific skills. The term has been misused by local MBA colleges to refer to short-term summer internships.

Usually, at the end of an internship, very few and only exceptional interns would be absorbed. It allows the company to work with qualified but inexperienced people without paying out costly salaries and provides the option of identifying the best of them to offer a permanent job.

Their training can be extended after 8 months for one year and another. It can go up to 36 months.