Incident – On December 3, dozens of engineering students alleged a Pune SaaS startup recruited over 60 interns promising stipends after a “learning phase,” but made them work full-time hours for two months without pay. Students said they wrote production code, fixed bugs, and attended client calls. When they asked about stipends, HR allegedly told them “only top performers will be selected for payout.” Screenshots of unpaid invoices and late-night GitHub commits surfaced online.
Emotional/Workplace Impact – Students described feeling exploited and misled. Many worked long hours hoping for PPOs and recognition, only to realise they were treated as free labour. Several said they felt ashamed telling their families they were unpaid despite working like employees. The experience created widespread disillusionment — students now fear startups cannot be trusted. Some reported mental exhaustion and burnout, unusual at such early career stages.
Compliance/Leadership Lens – Forcing interns to perform productive work without payment may violate labour laws and internship regulations. Companies must define learning objectives, provide stipends for productive tasks, and document mentorship. Leadership must ensure interns are not disguised workers. Colleges may blacklist such firms, and regulators could open probes. Ethical governance requires clear contracts, transparent evaluation systems, and fair compensation.
What safeguards should colleges implement to protect students from exploitative internships?
Should internships involving real work be mandatorily paid?
Acknowledge(0)
Amend(0)
7Emotional/Workplace Impact – Students described feeling exploited and misled. Many worked long hours hoping for PPOs and recognition, only to realise they were treated as free labour. Several said they felt ashamed telling their families they were unpaid despite working like employees. The experience created widespread disillusionment — students now fear startups cannot be trusted. Some reported mental exhaustion and burnout, unusual at such early career stages.
Compliance/Leadership Lens – Forcing interns to perform productive work without payment may violate labour laws and internship regulations. Companies must define learning objectives, provide stipends for productive tasks, and document mentorship. Leadership must ensure interns are not disguised workers. Colleges may blacklist such firms, and regulators could open probes. Ethical governance requires clear contracts, transparent evaluation systems, and fair compensation.
What safeguards should colleges implement to protect students from exploitative internships?
Should internships involving real work be mandatorily paid?
Acknowledge(0)Amend(0)
The situation described raises serious ethical and legal concerns. Interns are not free labor and should be compensated fairly for their work, especially when it contributes to the company's operations.
From a legal standpoint, labor laws in many countries stipulate that if an intern is engaged in productive work (i.e., work that benefits the company), they should be paid for their time. This is also in line with the Fair Labor Standards Act (FLSA) in the U.S., which sets the rules for internships. If the students were indeed writing production code, fixing bugs, and attending client calls, they were performing tasks that regular employees do, and thus, should have been compensated.
Colleges can take several steps to protect their students from exploitative internships. They can establish clear guidelines for internships, including the nature of the work, expected hours, and compensation. They should also vet companies before allowing them to offer internships to students. This includes checking the company's track record in terms of intern treatment and compensation. Colleges can also provide legal counseling to students to help them understand their rights as interns.
As for the question of whether internships that involve real work should be mandatorily paid, the answer is yes. If an intern is doing the same work as a regular employee, they should be paid accordingly. Unpaid internships can lead to exploitation and are often inaccessible to students who cannot afford to work without pay.
In conclusion, it's crucial for colleges, companies, and students to understand the laws and ethical guidelines surrounding internships. Exploitative internships not only harm students but can also damage the reputation of the company and the college involved.
From India, Gurugram
Acknowledge(0)Amend(0)
From a legal standpoint, labor laws in many countries stipulate that if an intern is engaged in productive work (i.e., work that benefits the company), they should be paid for their time. This is also in line with the Fair Labor Standards Act (FLSA) in the U.S., which sets the rules for internships. If the students were indeed writing production code, fixing bugs, and attending client calls, they were performing tasks that regular employees do, and thus, should have been compensated.
Colleges can take several steps to protect their students from exploitative internships. They can establish clear guidelines for internships, including the nature of the work, expected hours, and compensation. They should also vet companies before allowing them to offer internships to students. This includes checking the company's track record in terms of intern treatment and compensation. Colleges can also provide legal counseling to students to help them understand their rights as interns.
As for the question of whether internships that involve real work should be mandatorily paid, the answer is yes. If an intern is doing the same work as a regular employee, they should be paid accordingly. Unpaid internships can lead to exploitation and are often inaccessible to students who cannot afford to work without pay.
In conclusion, it's crucial for colleges, companies, and students to understand the laws and ethical guidelines surrounding internships. Exploitative internships not only harm students but can also damage the reputation of the company and the college involved.
From India, Gurugram
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Amendment to Payment of Bonus Act 2015.jpg
Bigger bonuses for more as Lok Sabha amends Payment of Bonus Act - The Economic Times.pdf
THE PAYMENT OF BONUS ACT.doc