Paying to work for free: Grim work reality for Gen Z exposed

They’re often considered a ‘necessary evil’ on the path to employment, but Gen Z has unleashed on a grim workplace reality.

Would you pay to work for free?

It’s an ironic question, but unfortunately, a very relevant one for a generation of students and graduates trying to get their foot in the door.

While unpaid internships may remain a “necessary evil” on the path to employment, calls to end the practice have been renewed after it was revealed students were paying thousands of dollars to work for free.

Study and Work (Budding Talents Recruitment Pty Ltd), an Australian-based career management and recruitment company, recently caught online attention when its Professional Internship Program sparked a debate about the role of third-party recruitment agencies.

According to its website, the company charges participants a “placement fee” of $2000 plus GST for a guaranteed internship without competition, or $4000 plus GST for an internship with job prospects at one of 2000 affiliated host companies, including Allianz Trade and Macquarie Health Corporation.

A recruitment company has come under fire over an advert for an unpaid internship program that costs $4,000. Picture: Supplied

Competition for entry-level jobs after university has been raised to new stakes. Picture: NCA NewsWire/Damian Shaw

Study and Work founder Ryan Shrestha told news.com.au the program is designed to help students and graduates struggling to find work in their field of study.

“Our aim is to find them all internships where they don’t have to pay any fees, if possible,” Mr Shrestha said.

“But we get so many applications that it’s not possible to go out there and find companies who can take them all. So in some cases, if the company is not willing to cover our fees, we give the candidates an option to cover the fees on their own and we call them self-funded interns.”

Who pays?

Mr Shrestha said students can join the program for free and compete against other candidates for roles. However, guaranteed positions come with a price tag, and one particular group of students are increasingly eager to pay their way around the competition.

“We have local students and we also have international students. It’s usually the international students who pay our fees, but that is not always the case,” he continued.

International students are more likely to pay to secure an internship, according to Study and Work. Picture: Lachie Millard

“Usually the local students are smart enough to find their own internships, but having said that, there are cases where they find it difficult.

“I know some people think we’re encouraging free labour but the thing is, we are only talking about highly specialised roles. We’re talking about engineers, IT graduates, finance graduates. “They actually have to do these internships as part of their courses in many cases,” he continued.

“Also they want to do it, there’s a demand for it, and we’ve been doing it for the last 17 years already,” he said.

The internship program covers 12 weeks of supervised work experience and is one of four services offered by the company, alongside an Australian Traineeship Program, Professional Job Placement, and Graduate Placement Program.

Mr Shrestha acknowledged the internship program had faced scrutiny in the past, but insisted his service should not be confused with “using people for free in cafes and restaurants”.

“We have placed more than 6000 graduates and there hasn’t been a single case against us with the Fair Work Ombudsman,” Mr Shrestha said.

Unpaid internships are often considered a ‘necessary evil’ on the path to employment, but now Gen Z may have to pay to work for free. Picture: NCA NewsWire/Dan Peled

“The Ombudsman has already audited us two times already in 2010 and 2018 and they found we were not breaking any laws because we are basically working on behalf of the candidates.

“But the labour union people, they’re the ones who want to make a big issue out of this, and I tell them, please don’t confuse our service with using people for free in cafes and restaurants. It’s not the same situation, we’re dealing with professionals.”

The post-university ‘bottleneck’

Mr Shrestha pointed towards the university sector’s reliance on attracting international students – and the revenue they generate – as the root problem and the source of demand for his services.

“To be honest, international students are kind of getting exploited by universities, to tell you bluntly,” he said.

“For a Bachelor of Engineering they will pay $150,000 for the course and still (the universities) are not helping them find internships or job placements.

“They spend so much money, time and effort to stay in Australia, but not even 20 per cent are working in their field of study. They’re all working as Uber drivers, cleaners, hospitality staff, so we want to bring justice to them as well,” he continued.

Competition and cultural barriers have created demand for third-party recruitment agencies. Picture: Supplied

“They come to Australia with so many expectations, and they pay so many fees, and they don’t get to use what they’ve learnt. They are discriminated against in the industry, and they are already paying $150,000 for a degree.

“We are charging them an additional $2000 to get a job – I don’t think we are doing anything wrong,” he said.

‘Yeah, nah...’ Aussies react to unpaid internship offer

A screenshot of the company’s unpaid internship offer was shared online by a concerned Aussie who questioned the practice.

“Yea, nah... Don’t do it!” wrote one person.

“I wouldn’t hand over any cash for placement,” added another.

“Fair day’s pay for a fair day’s work. Working for nothing is called volunteering,” wrote a third.

Others questioned whether it was legal to charge students money to help them secure unpaid internships.

Is unpaid work legal in Australia?

Hart & Co Lawyers Director and employment law expert, Roxanne Hart, said although Mr Shrestha’s Study and Work services may raise eyebrows, unpaid internships are legal in Australia under certain conditions.

“An unpaid internship is legal at the moment requiring the intern receives the most benefit,” Ms Hart said.

“In general I have no issue with unpaid internships and I did many during my time studying to become a lawyer … this (Professional Internship Program) formalises those internship arrangements.

Ryan Shrestha founder of Study and Work. Picture: LinkedIn

Roxanne Hart, Director and employment law expert. Picture: Hart & Co Lawyers

“As a lawyer what I would be concerned about is exploitation in the workplace, especially if the intern is from overseas and may not be familiar with Australian workplace laws, their entitlements, and the National Employment Standards (NES).”

“I think the current laws are good but what needs to be better is enforcement, and the test is whether you are getting more out of it than the business,” Ms Hart continued.

“If you are doing work that is going towards a client and the business is making money from it then you need to be paid.”

Originally published as Paying to work for free: Grim work reality for Gen Z exposed