Are Unpaid Internships Legal in Australia?

Are unpaid internships legal in Australia? Yes, but only in two situations: a vocational placement that’s a formal requirement of an approved course, or an arrangement where no employment relationship exists. What the intern actually does each day decides which side of the line you’re on, whatever the paperwork says. Get it wrong and you’re looking at back-pay and penalties under the Fair Work Act 2009 (Cth).

Most businesses that get this wrong aren’t trying to exploit anyone. You take on a keen student, hand them real work because watching from the sidelines feels like a waste of their time, and they’re happy to do it for free. Their agreement doesn’t make it lawful. The work does.

What is an unpaid internship in Australia?

An unpaid internship is a work experience arrangement where someone spends time in your business to learn about an occupation or industry without receiving wages. The Fair Work Ombudsman treats it as a form of on-the-job training that only stays unpaid while no employment relationship exists.

Here’s what trips people up. “Intern” isn’t a legal category. The Fair Work Act never uses the word. It deals with employees and with vocational placements, and every internship lands in one of those buckets based on what happens day to day.

Look at who the FWO’s internship guidance is written for: graduates chasing experience after finishing a qualification, overseas students and migrants after local experience, and career changers. Graduates are the group most likely to be doing real work. They’re also the group with no course to shelter under.

Are unpaid internships legal in Australia?

Yes, in two situations. Either it’s a formal vocational placement under an approved education or training course, or there’s no employment relationship at all. Both are legitimate. Both have conditions that are easy to miss.

Vocational placements

Section 12 of the Fair Work Act defines a vocational placement. It can lawfully be unpaid when all three of these are true:

• The person isn’t entitled to be paid for the placement.
• The placement is a requirement of their education or training course.
• The course is authorised under a Commonwealth, state or territory law or administrative arrangement.

That covers nursing, teaching, social work and law students whose degrees require workplace hours, plus TAFE and RTO placements. It doesn’t cover a graduate who has already finished. It also doesn’t cover an internship the course merely recommends. Elective doesn’t count. Required does.

Before day one, get written confirmation from the university or TAFE that the placement is a course requirement they’ve authorised. That email takes five minutes and it’s your best evidence if anyone questions the arrangement later.

Arrangements with no employment relationship

Outside a vocational placement, unpaid work is only lawful if no employment contract has formed. That can happen even when both sides agree there’s no pay. The FWO looks at six questions:

• What did both parties agree to, and did the person expect to be paid?
• Was the reason for the arrangement to give experience, or to help run the business?
• How long did it go on?
• How important was the work to the business’s day-to-day operations?
• What work was the person actually doing?
• Who got the main benefit?

Want a lawful example? The FWO points to a local council program. High school and uni students pick their own hours over two weeks, mostly observe, and get the main benefit. Swap in set hours and real output and the answer changes.

Intern, student, volunteer or employee: which one do you actually have?

Most of the confusion comes from blurring four different arrangements together. Here’s how they compare.

Arrangement	When it applies	Do you have to pay?	What to put in writing
Vocational placement	A required part of an approved course, authorised by the education provider	No	Written confirmation from the provider, plus an internship agreement
Unpaid internship or work experience	Mostly observation and learning, short, and the intern gets the main benefit	No	An internship agreement setting out the learning purpose and limits
Volunteer	Unpaid work for a not-for-profit or community purpose, with no expectation of pay	No	A volunteer agreement
Employee (including a paid intern)	Productive work the business relies on, done under its direction	Yes, at least the award or National Minimum Wage	An employment agreement

Row two is where businesses get caught. Many treat it as the default. It’s the narrowest of the four and the one courts test hardest.

Volunteering sits almost entirely in the not-for-profit world. If a for-profit business calls an unpaid helper a volunteer, expect it to be tested the same way as an internship. Our guide to hiring volunteers or interns covers the differences in more detail.

How can you tell if an unpaid internship is actually employment?

Courts and the FWO ignore the label and look at the substance. These are the factors that decide it.

The type of work. Writing copy, preparing client documents, managing accounts or running campaigns is what paid staff do. Observing, shadowing and practising skills on work that never reaches a client sits in the safer zone.

Who benefits most. If the business is getting output it would otherwise pay for, that’s a strong sign of employment. The intern should be the clear winner from the arrangement.

Length and structure. There’s no legal maximum. The FWO’s position is simple: the longer it runs, the more likely the person is an employee. A two-week observation program is one thing. Three months with set hours and performance expectations looks like a job.

Whether attendance is expected. If you roster the intern, need them in on set days, or would feel the gap if they didn’t show up, that points to employment. A real intern can come and go without disrupting operations.

Whether a job is dangled at the end. This one catches employers off guard. Promising a role on completion suggests the intern is working now in exchange for something of value later. Courts treat that as part of an employment bargain, even with no wages paid.

No single factor settles it. They’re weighed together, and every extra one that applies to you raises your exposure.

Do interns get paid in Australia?

Some do, and more should be than currently are. A paid intern is an employee, so the full minimum standards apply from the first hour. Australian law has no special intern rate.

From 1 July 2026, the National Minimum Wage rises to $26.44 an hour, or $1,004.90 for a 38-hour week. That’s the floor for award-free adult employees. If a modern award covers the work, the award rate applies instead, and it’s often higher.

Award coverage depends on the industry and the work being done, not the job title or the person’s age. Many awards include junior, trainee or entry-level classifications that may fit an intern. Our guide to modern awards explains how to find the right one.

Taking them on as a casual? Award-free casuals get a 25% loading on top of the minimum rate, and award-covered casuals get the award’s loading. A casual employment agreement keeps the hours and pay terms clear.

Super is 12% of ordinary time earnings. Since 1 July 2026, Payday Super means it goes out with each pay run instead of quarterly. The exception worth knowing: interns under 18 working 30 hours a week or less don’t attract compulsory super. Paid interns also get the National Employment Standards, including paid leave if they’re part-time or full-time.

If you’re the intern

Doing productive work your course doesn’t require? You’re likely an employee, whatever you signed. Keep a simple log of your hours and tasks as you go. That record turns a vague grievance into a back-pay claim, and the Fair Work Ombudsman can help free of charge.

Is an unpaid trial the same as an unpaid internship?

No. A trial is part of recruiting for a vacant job, and the rules are tighter. The FWO says it can be unpaid only if it’s limited to demonstrating skills relevant to the role, lasts no longer than needed to show them, and happens under direct supervision the whole time. Depending on the job, that’s anywhere from an hour to a single shift.

A pattern Lawpath lawyers see repeatedly is the “try before you hire” internship. A business wants to assess a candidate, so it brings them in as an intern for a few weeks. The person does real work while the business judges their performance. That’s a job assessment, and anything past a short supervised skills test has to be paid. See our guide on when an unpaid trial shift is legal.

What happens if you get an unpaid internship wrong?

In June 2016, the Federal Circuit Court ordered Sydney media company AIMG BQ to pay $272,850 in penalties. It had required an international student to do 180 hours of productive work over four months, from administration to event organising and magazine editing, before paying her a cent. Her course didn’t require the placement, so it was never lawful to leave it unpaid.

Then the company paid her $50 a day, which worked out to about $6.56 an hour. The judge said the penalty was meant to send a serious message to employers who disguise employment as unpaid internships.

Closer to home for many small firms is a scenario from the FWO’s own guidance. A final-year accounting student agrees to an unpaid internship at an accountancy practice that has promised him a job after graduation. He comes in three days a week, prepares tax returns and company financials, and the firm bills clients for his work. Despite his agreement, the FWO’s view is that the firm should pay him for every hour.

The stakes rose on 1 January 2025. Intentionally underpaying an employee became a criminal offence under the Fair Work Act, with up to 10 years’ jail for individuals. Civil penalties also increased for employers that aren’t small businesses, and those apply even when the underpayment was a mistake.

Small business employers (fewer than 15 employees) that comply with the Voluntary Small Business Wage Compliance Code shouldn’t be referred for criminal prosecution. Complying starts with paying people correctly, and that includes not labelling an employee as an intern.

Complaints rarely come from a happy intern mid-placement. They come months later from an ex-intern whose job offer never arrived, or from a staff member who’s been picking up the slack. By then, back-pay has built up every week. If you suspect a current arrangement has crossed the line, speak with a Lawpath employment lawyer before someone else raises it.

What else do you owe an intern, paid or unpaid?

Even a lawful unpaid placement comes with obligations. These are the ones that get missed.

Work health and safety. Interns are “workers” under WHS laws whether you pay them or not. You owe them a safe workplace, a proper induction and real supervision, the same duty of care you owe staff. Not paying them is no defence if they’re hurt.

Protection from sexual harassment. Since 6 March 2023, the Fair Work Act has prohibited sexual harassment of workers, and that explicitly includes work experience students and volunteers. Your policies and induction need to cover interns from their first day.

Insurance. Many universities and TAFEs insure students on required placements, but get the details in writing. Outside a formal course, your workers’ comp policy may not extend to an unpaid intern, and public liability won’t fill that gap. Call your insurer before the intern starts.

Confidentiality and IP. Interns see client files and produce real material. Without written terms, ownership of what they create is unclear. Cover both in your internship agreement, add a non-disclosure agreement if they’ll see sensitive commercial information, and use an assignment of intellectual property if they’ve built something you plan to sell or license.

International students. Student visa holders can work up to 48 hours a fortnight while their course is in session. Work that’s a formal, registered part of the course doesn’t count toward that cap. An internship that turns out to be employment does count, which puts the student’s visa at risk as well as your business.

What if the internship changes halfway through?

This is an underrated risk. A placement starts out observational. The intern is sharp, so they get more responsibility. A month later they’re handling client work. Nothing has changed on paper, but the legal character of the arrangement has.

Revisit the arrangement whenever it changes. That’s the FWO’s advice. If the intern is now doing productive work, move them onto a paid arrangement with a proper employment agreement. Keeping the “intern” label on a role that has quietly become a job only grows the back-pay bill.

For any placement longer than two weeks, book a ten-minute check-in at the halfway point. Ask three questions. Has the scope changed? Are we relying on this person? Would we need to cover their work if they stopped coming in? A yes to any of them means it’s time to reassess.

How do you set up a compliant unpaid internship?

Run through these before the intern starts:

1. Confirm whether it’s a vocational placement. If it is, get written confirmation from the university, TAFE or RTO that it’s a course requirement.
2. Map the tasks. If the intern will do work a paid staff member would otherwise do, restructure the role or pay them.
3. Set a firm end date before day one. Short and defined is far easier to defend than open-ended.
4. Keep job offers out of it. Hoping to hire them later is fine. Using a future job as the incentive is not.
5. Put it in writing: the learning purpose, duration, supervision, confidentiality, IP and the non-employment nature of the arrangement.
6. Check your insurance covers this person.
7. Book the midpoint check-in.

If you can tick every box, you’re in a solid position. If you can’t, sort it out before the intern walks through the door.

What are the most common unpaid internship mistakes?

• Advertising an “unpaid internship” for a role you’d otherwise hire someone to do.
• Taking on a recent graduate unpaid because it’s common in the industry. Graduates have no course to rely on.
• Mentioning a job at the end as the reason to take the internship.
• Letting the scope grow without switching the person onto pay.
• Assuming the education provider’s paperwork covers your WHS and insurance obligations.

Frequently asked questions

Are unpaid internships legal in Australia?

Yes, but only in two situations. The internship must be a vocational placement that’s a formal requirement of an approved course, or there must be no employment relationship at all. In practice, that means the intern mostly observes and learns, isn’t doing productive work the business relies on, and gets the main benefit.

Do you get paid for an internship in Australia?

If you’re doing productive work that your course doesn’t require, you should be. A paid intern is an employee and gets at least the award rate or the National Minimum Wage, plus super and the National Employment Standards. Only vocational placements and short, learning-focused arrangements can lawfully be unpaid.

What is the minimum wage for an intern in Australia?

There’s no separate intern rate. From 1 July 2026, the National Minimum Wage is $26.44 an hour, or $1,004.90 for a 38-hour week. If a modern award covers the work, the award rate applies instead. Junior and trainee rates can apply to some younger workers.

Can a graduate do an unpaid internship in Australia?

Rarely. Once someone has graduated, the vocational placement exemption no longer applies. An unpaid arrangement is only lawful if no employment relationship exists, which is hard to show when a graduate is doing real work. In most cases, a graduate doing substantive work should be paid.

How long can an unpaid internship last?

There’s no fixed maximum in the Fair Work Act. Duration is one of the factors the Fair Work Ombudsman weighs, and the longer an arrangement runs, the more likely it is to be employment. Set a short, firm end date before the placement starts.

What is a vocational placement?

A vocational placement is unpaid work experience that’s a requirement of an approved education or training course, such as a nursing student’s clinical hours. It must be authorised under Commonwealth, state or territory law or administrative arrangements. Placements a course recommends but doesn’t require don’t qualify.

What happens if I underpay an intern who is really an employee?

You’ll have to back-pay wages and super at the correct rate, and you can face civil penalties under the Fair Work Act. Since 1 January 2025, intentionally underpaying an employee is also a criminal offence. Courts have imposed penalties of more than $270,000 over disguised unpaid internships.

Does an intern need to sign an agreement?

Yes. Before any placement starts, both parties should sign an internship agreement covering the learning purpose, duration, supervision, confidentiality and IP ownership. It won’t make an unlawful arrangement legal, but it records the terms of a lawful one and protects both sides.

Are unpaid interns protected from workplace harassment?

Yes. Since 6 March 2023, the Fair Work Act has prohibited sexual harassment of workers, including work experience students and volunteers. Unpaid interns are also covered by work health and safety laws, so you owe them the same duty of care as your paid staff.

Is an unpaid internship the same as work experience?

They’re closely related. Work experience usually means shorter, observational placements, often arranged through schools. Internships tend to be longer and more structured. The same Fair Work rules apply to both: what matters is the nature of the arrangement, not what it’s called.

Where to from here?

If you’ve realised your current intern is doing real work, you’re not in trouble yet. Fixing it now costs far less than fixing it after a complaint. Move them onto an employment agreement, pay them properly from here, and get advice on any back-pay.

Starting fresh? Setting up an internship properly takes about an hour. Confirm the placement with the education provider, keep the scope to learning, check your insurance, and put the terms in writing.

Start your Internship Agreement today and have the terms locked in before your intern’s first day.