Unpaid Work In Australia: Interns, Volunteers And Contractors

If you run a small business, you’ve probably had a moment where you’ve thought: “Could I bring someone in to help out for experience?” Or maybe someone has approached you and offered to “volunteer” to learn the ropes.

On the surface, unpaid work can seem like a win-win. You get extra hands, and the other person gets skills, mentoring, and something for their resume. But in Australia, unpaid work is an area where businesses can accidentally step into serious legal risk - especially if what you’re calling an “internship” or “trial” is actually an employment relationship under workplace laws (including the Fair Work Act 2009 (Cth) and any applicable modern award).

The tricky part is that unpaid work isn’t a single category. Interns, volunteers and independent contractors are all treated differently, and the legal rules depend heavily on what’s happening in practice (not just what you call the arrangement).

Below, we’ll break down what unpaid work is, where it commonly goes wrong, and how you can structure arrangements in a way that protects your business while still creating genuine opportunities.

What Is Unpaid Work (And When Is It A Problem)?

In simple terms, unpaid work is when a person performs tasks for a business (or organisation) without receiving wages or salary.

The legal issue usually isn’t the concept of unpaid work itself. The issue is when an unpaid arrangement looks and operates like paid employment - and the business hasn’t paid minimum wages or met Fair Work obligations.

When regulators (like the Fair Work Ombudsman) and courts look at an arrangement, they generally focus on the real substance of the relationship, such as:

• Who benefits most from the work - is it the worker learning, or is the business getting productive labour?
• What the person is doing - are they observing and learning, or are they filling a role you would normally roster a staff member to do?
• How much control you have - are you directing their hours, methods and tasks like you would an employee?
• How integrated they are into your business - do they have set shifts, responsibilities, KPIs, and expectations like the rest of the team?
• How long it runs - unpaid “experience” that goes on for weeks or months is much more likely to raise red flags than a short, structured learning placement.

Even with the best intentions, if someone is effectively working as part of your business, the safest assumption is that they should be paid at least minimum wage (and receive proper entitlements, if applicable).

This is why it’s helpful to get clear on the categories that most small businesses deal with: interns, volunteers and contractors.

Unpaid Interns: When “Work Experience” Is (And Isn’t) Allowed

Internships are one of the most common sources of confusion for small businesses.

In many cases, a business owner thinks they’re offering a learning opportunity, but the intern ends up doing regular business tasks that directly contribute to revenue - and the internship becomes unpaid work that should have been paid employment.

Internship Vs Employment: The Practical Difference

Internships can be lawful in some contexts, but the risk increases when the intern is:

• doing productive work that would otherwise be done by a paid employee
• required to attend at specific times like rostered staff
• managed like an employee (performance expectations, KPIs, disciplinary processes)
• the main beneficiary is your business rather than the intern’s learning

By contrast, an internship is more likely to be appropriate where:

• it is structured around learning outcomes and supervision
• the intern is primarily observing, training and practicing skills (not filling a staffing gap)
• it’s short, limited and clearly defined

If They’re Doing Real Work, Plan To Pay Them

If the role you’re offering looks like a genuine job - even if it’s entry-level - it’s usually safer to treat it as employment and pay appropriately (including at least minimum rates under the relevant award or agreement, where applicable).

From a business perspective, this also helps you create clear expectations. A properly drafted Employment Contract can set out duties, hours, confidentiality, and the rules around ending the arrangement.

What About “Trial Days”?

Trial shifts are another common unpaid work trap.

A short, lawful trial is generally limited to what’s reasonably necessary to assess whether someone can do the job (and in many cases, it should be paid). If the person is performing productive work for an extended period, or you’re using trial shifts as free labour during busy periods, you may be exposed to claims for unpaid wages.

If you want to test a candidate fairly, keep it short, supervised, and focused on assessment rather than output. And if you need them to actually cover work, it’s often better to pay them for that time.

Volunteers: A Different Category (But Not A Free Pass)

Volunteers are usually associated with charities, community groups, sporting clubs and not-for-profits.

But small businesses sometimes use the word “volunteer” when a person is helping out informally - for example, a friend “volunteering” at a pop-up, or someone helping at an event in exchange for experience.

For most for-profit businesses, a true volunteer relationship can be difficult to establish, because the business is operating to generate profit. If someone is working in your business and contributing to that commercial operation, it’s more likely the law will view them as a worker who should be paid. That said, there are limited situations where unpaid help might occur in a for-profit context (for example, a genuine family business situation or a genuine community event), but these are fact-specific and still risky if the arrangement looks like employment in practice.

When Volunteer Arrangements Are More Common

Volunteer arrangements tend to make more sense where the organisation is:

• not-for-profit or community-based
• run primarily for a charitable, sporting, educational, religious or community purpose
• not distributing profits to owners/shareholders

Even then, it’s still important to set expectations. A clear Volunteer Agreement can help outline what the volunteer will do, what support you’ll provide, and boundaries around expenses, safety and conduct.

Don’t Forget Workplace Safety And Behaviour Standards

Whether someone is paid or unpaid, you still have duties to keep people safe at work and to manage conduct appropriately (including under work health and safety laws).

That’s where having a tailored workplace policy set can make a real difference - especially if you have interns, volunteers, contractors and employees working alongside each other.

Contractors And “Free” Help: When Unpaid Work Becomes A Bigger Risk

Independent contractors are different again - and they’re often misunderstood.

A contractor typically runs their own business and provides services to your business under a commercial arrangement. Contractors are usually paid a fee for those services, and they invoice you.

So where does unpaid work come into this?

• A person may agree to “help out for free” to build a portfolio (for example, a designer, videographer, marketer or developer).
• A contractor arrangement may be described as “freelance” but operate like employment (for example, set hours, exclusivity, or significant control), creating legal risk - including the risk of the person being found to be an employee (sometimes referred to as “sham contracting” where there’s deliberate misrepresentation).
• A business may offer “exposure” or “future work” instead of payment, without a clear written agreement - which can create disputes over ownership, deliverables and IP.

If They’re A Contractor, Put The Deal In Writing

Even if the work is discounted or done at a very low fee, you should still clearly document the arrangement.

A tailored Contractors Agreement can help you set out:

• the scope of services and deliverables
• timeframes and milestones
• payment terms (even if it’s $0, a nominal fee, or “in-kind” value)
• who owns the intellectual property created
• confidentiality obligations
• how the relationship ends and what happens to unfinished work

Confidentiality Still Matters (Especially With Interns And Contractors)

If someone is getting access to your customer lists, pricing, supplier terms, product plans, marketing strategy or systems, you should think about confidentiality early.

Depending on the situation, a Non-Disclosure Agreement can be a simple way to reduce the risk of sensitive information being shared or reused.

This is particularly important where the person is not an employee (because employees usually have confidentiality obligations in their employment contract and implied duties, whereas non-employees may not unless you’ve put it in writing).

How To Use Unpaid Work Opportunities Without Creating Legal Headaches

If you want to offer internships, student placements, or learning opportunities (or if someone offers to help without pay), the best approach is to be proactive and structured.

Here are practical steps you can take to reduce risk and keep things fair and transparent.

1. Be Honest About Why You Want The Role

Ask yourself: are you looking for a learning placement, or do you actually need a worker?

If you need someone to perform regular tasks that keep the business running, it’s usually better to hire them properly and pay them. Unpaid work should not be used as a substitute for staffing.

2. Define The Arrangement (In Writing)

Clarity prevents disputes. Even a short written agreement can help everyone understand what’s happening.

Your documents may include:

• a volunteer agreement (where volunteering is genuinely appropriate)
• a contractor agreement (for genuine independent contractors)
• an employment contract (if the role looks like a job)

If you’re unsure which category fits, that’s usually a sign it’s worth getting advice before the arrangement starts - it’s much easier to set it up correctly than to fix it later.

3. Set Boundaries Around Hours, Tasks And Supervision

Unpaid arrangements become risky when the person is treated like staff. Consider:

• keeping the arrangement short and structured
• focusing tasks on learning and observation, where relevant
• avoiding responsibility for core business operations
• ensuring proper supervision (not leaving them to “run the shift”)

If the person is doing meaningful productive work for you, paying them is generally the safer and more sustainable option.

4. Manage Privacy And Customer Data Carefully

Interns, volunteers and contractors often end up with access to customer emails, booking systems, CRMs, mailing lists or payment platforms.

Make sure you’re thinking about privacy and data handling, especially if the person is working remotely or using their own devices.

If your business collects personal information, having a properly drafted Privacy Policy is an important foundation - and it also helps you set expectations internally about how data should be handled.

5. Protect Your Brand And Quality Standards

Even if someone is unpaid, the way they interact with customers reflects on your brand.

It can help to:

• provide basic training (even for short placements)
• document acceptable behaviour and communication standards
• ensure they understand your safety processes and escalation pathways

Doing this upfront reduces the risk of customer complaints, misunderstandings, and reputational damage.

6. Keep Records

If there is ever a dispute about whether someone should have been paid, good records matter. Keep basic documentation such as:

• any written agreement or email summary of what was agreed
• dates and hours attended
• supervision/training notes (where relevant)
• any payments made (even reimbursements)

This is not about creating bureaucracy. It’s about being able to show that you acted responsibly and transparently.

Key Takeaways

• Unpaid work is a high-risk area for small businesses when the arrangement looks like paid employment in practice, even if you call it an internship or trial.
• Unpaid internships are more defensible when they are genuinely focused on learning and supervision, rather than filling a real staffing need.
• Volunteers are typically connected to not-for-profits and community organisations, and “volunteering” is rarely a good fit for for-profit businesses (although there can be limited, fact-specific exceptions).
• Contractors should generally be paid for services, and even low-fee or portfolio-building work should be documented clearly to avoid disputes about deliverables, IP and confidentiality.
• Written agreements, clear boundaries, and sensible policies help you reduce risk and build trust with people who support your business.
• If you’re unsure whether an arrangement is lawful, it’s best to get advice early - it’s much easier to set it up correctly from day one than to untangle problems later.

Tip: This article is general information only and does not constitute legal advice. If you’d like help setting up an internship, volunteer or contractor arrangement the right way (or you’re worried an unpaid work arrangement might actually be employment), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.