Hosting interns means that companies have certain labour-related obligations to their interns. However, the Labour Relations Act (66 of 1995) allows for flexibility in that employers may use fixed-term contracts for their interns. The minimum guidelines as per that law are as follows:
- Interns in companies who are paid stipends may be employed on limited fixed term contracts. This means they are essentially employees of the companies, for a limited duration.
- Benefits are awarded at the companies’ discretion. However, it is worth noting that benefits such as medical aid, pension funds, disability cover and so on are usually not offered as part of fixed-term packages.
- As with standard labour contracts, the interns have contractual obligations and where they do not meet these, they may be subjected to standard disciplinary processes.
- A fixed-term contract may be renewed. However, there have been cases where employers use it to avoid hiring employees on a permanent basis (and therefore being obligated to offer them benefits). In order to protect employees from this abuse, changes to the Act were made, including the requirement that any contract renewals be ‘justified’.
Also note that organisations employing young people into internships may qualify for the Employment Tax Incentive (ETI) – which is currently under review. For everything you need to know about the ETI click here.