The internship culture has existed in a mainstream way in established markets such as the US, UK and others. However, in India many companies are realizing the potential benefits of having an internship program of their own.
If companies are planning on implementing an internship program they should make sure that it is compliant with the law of the land.
Here is a video from the guys at eLagaan which seeks to explain the legal perspective of hiring an intern, in just about 5 minutes.
Key takeaways from the video:
1. Temporary engagement
Companies should make sure that they specify in their records as well in offer letters that interns will be joining the company on a temporary basis.
2. Stipends and not Salaries
Companies should make sure that compensation to interns should be termed as stipends and not salaries. This is because salary implies that the person is a full time employee. This will help you avoid taxes such as TDS, PF etc.
3. Converting an internship into a permanent position
If you have done a performance review on an intern and deemed that person fit to join your company as an employee, you can do so by issuing fresh offer letters which consider the intern as an employee. The tax breaks will be gone after this move and you need to be confident that the said intern is a value add to the company.
We hope you have gotten clarity on the legal considerations of hiring an intern in India. Now the next step is to search and find the best interns for your company. You can do this by signing up on Switch Idea and posting your opening.
Source | NextBigWhat