Is it legal to charge interns money in India?

Charging interns or candidates a fee for internships or training is not supported by Indian labour principles and is widely viewed as exploitative. Employers are expected to pay workers, not collect money from them. It can invite legal complaints and reputational damage.

Are unpaid internships legal in India?

Unpaid internships are permitted when they are short term and genuinely focused on learning or academic credit. If an unpaid intern performs regular employee work, authorities or courts can reclassify them as an employee and order payment of wages.

Do employers have to pay a stipend to interns in India?

Outside the Apprentices Act there is no general rule that all interns must be paid a stipend, but paying a fair stipend is best practice and reduces the risk that the intern is treated as an underpaid employee.

Can interns claim minimum wages in India?

If an intern is doing full time productive work similar to regular staff, they may argue they were in fact an employee and claim minimum wages and other benefits for the period of work.

Are interns covered under the PoSH Act in India?

Yes. Interns and trainees are treated as employees for the purpose of the Sexual Harassment of Women at Workplace Act, so they must be able to access the Internal Complaints Committee.

Internship compliance for employers across India

Internship compliance in India: unpaid work, stipends, and paid training risks explained

Understand what the law expects from employers when they host interns in India. Learn where unpaid internships are acceptable, why paid training schemes are risky, and how to protect your company with clear documentation using Offrd.

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✅ Written from an employer point of view ✅ Based on current Indian labour and internship practice ✅ Designed for voice and AI search queries

High risk area: paid training and internship fees

Quick answer for employers

If you ask interns to pay you for training or for the opportunity to work, you carry avoidable legal and reputational risk. Indian law expects the employer to pay the trainee, not the other way around.

The safer route is simple: treat interns as learners, document the relationship clearly, avoid charging any fee, pay a fair stipend wherever possible, and keep an auditable trail of letters and agreements.

Offrd helps you do all of this with structured templates and a digital record for every intern.

Short answers to the questions employers ask most often

These are written in a clear question and answer style so that they can be picked by voice search and AI search tools.

Voice friendly

Is it legal to run unpaid internships in India?

Yes, unpaid internships are allowed when they are short term, clearly focused on learning, and usually linked to studies. If an unpaid intern ends up doing the work of a regular employee for long hours, an authority can treat them as an employee and order payment of wages.

Do I have to pay a stipend to interns?

There is no single rule that all interns must be paid, except for apprentices under the Apprentices Act, where stipend is mandatory. Still, paying a reasonable stipend is a strong risk control and goodwill signal for your brand.

High risk area

Can a company charge interns a fee for training or onboarding?

It is not advisable to charge any fee from interns or applicants in exchange for work experience. Such schemes can be viewed as exploitative and may be challenged as unfair practice or negative wage. The safe approach is to avoid deposits, security amounts, or paid training offers linked to work.

When does an intern become an employee in the eyes of law?

If the person works like a regular staff member, produces output that directly supports your operations, has set targets, and stays on for a long period, authorities may ignore the label intern and treat them as an employee with wage and benefit rights.

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How internships are treated under Indian law

There is no single Internship Act in India. Employers have to read internships through existing laws and guidance. A few important points stand out.

Apprentices and formal trainees

The Apprentices Act, 1961 creates a clear route for formal apprentices. Under this route, a written contract is registered, a stipend is mandatory, and the person is treated as a trainee and not a worker for most labour laws. Many large employers also define trainees in their standing orders to get similar treatment.

Interns as a practical category

Intern is a practical term rather than a defined role in most statutes. Courts and inspectors look at the real nature of work. If the internship is short, training centric, supervised, and clearly documented as learning, that supports the view that the person is not a regular employee.

State level rules and shops and establishments laws

State shops and establishments laws often set conditions for workers in offices and commercial setups. Some states exclude trainees or apprentices from the definition of worker while others do not. If your company operates across multiple states, you should know which rules apply where your interns sit.

PoSH coverage for interns

Interns, trainees, and even volunteers are covered under the Sexual Harassment of Women at Workplace Act. They must be able to access your Internal Complaints Committee. Failing to include them in communication and training can create exposure for your company.

Unpaid internships, stipends and why charging interns money is a bad idea

When unpaid internships are usually acceptable

In practice unpaid internships are common in India and have not been banned. They are more defensible when:

The role is clearly positioned as learning and observation.
The duration is limited, for example two to six months.
The intern is a student and receives academic credit or similar benefit.
There is a written internship letter that explains the training purpose.
The company does not rely on interns to run its day to day business.

Even for unpaid roles it is thoughtful to cover basic expenses such as local travel or meals when feasible.

Why paying a fair stipend still helps

Paying a stipend is not only an ethical choice but also a practical shield. It shows you acknowledge the value of the intern’s time. If the intern’s work is close to employee work, a fair stipend also makes it less likely that the arrangement will be criticised as exploitation.

Charging interns fees under the label of paid training

Some organisations try to charge candidates money for a so called training program that is tied to internship or live projects. This may look attractive as a revenue stream but carries significant risk.

Common problems with these schemes:

Contradicts the basic rule that an employer pays for work, not the other way around.
Invites complaints of cheating if the promise of experience or placement is not met.
Can be attacked as negative wage or forced labour if the intern has to work long hours after paying.
Damages brand reputation with students, colleges, and on social media.
Makes campus hiring harder if institutions blacklist such employers.

Safe policy for employers is simple. Do not charge any deposit or internship fee. If you need interns to use a uniform or tools, provide them at company cost or on a returnable basis.

When does an intern become an employee and what can that cost you

Labels on paper matter less than reality on the ground. If someone called an intern works like a regular team member, your company can be held to employee obligations for that person.

Common signs of misclassification

The intern handles core daily tasks that directly drive revenue.
The intern works fixed hours with the same expectations as permanent staff.
The internship keeps getting extended instead of moving to a proper offer.
There is no training plan or supervisor record, only production targets.

Possible consequences

Demands for unpaid minimum wages or overtime for the full period.
PF and ESI authorities questioning why contributions were not made.
Back payments with interest and penalties.
Complaints under payment of wages laws for delayed or missing stipend.
Reputational impact if the case becomes public or shared online.

A structured internship program with clear letters and records is often the difference between a short query and a full blown dispute.

Practical checklist for compliant internships across India

Use this as a working list for your HR and legal teams. Offrd can help you implement it in your day to day documentation.

Define the purpose. Clarify whether the internship is for exposure, a course requirement, a project, or a pre hiring pipeline.
Set a start and end date. Avoid open ended internships. Keep them time bound and usually not more than six months.
Issue a written internship letter. Spell out training focus, duties, duration, stipend or no stipend, and a clear statement that this is not employment.
Do not charge any fee. Confirm in writing that there is no deposit, training fee, or onboarding amount collected from the intern.
Assign a supervisor. Make one person responsible for training and regular check ins.
Limit workload. Keep the intern away from continuous standalone roles that look like a full time position.
Include the intern under PoSH communication. Ensure they know how to raise a concern.
Pay a fair stipend where budget allows. Even a modest amount improves morale and risk posture.
Keep simple records. Attendance, key tasks, feedback notes, and stipend payments should be traceable.
Issue a completion certificate. At exit, give a certificate and obtain an acknowledgment that dues are cleared.

With Offrd, most of these steps become templates you can reuse. You can generate and store internship letters, offer letters, experience letters, and exit documents from one dashboard.

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How Offrd helps employers run safe internship programs

Offrd is built for Indian startups and small and mid size businesses that want professional HR documentation without adding a full legal team.

Templates for every internship stage

Internship invitation and selection letters.
Internship agreement with clear training focus and no fee clause.
Stipend confirmation and change letters.
Internship completion certificate and feedback letters.

All templates are editable, so your legal adviser can refine language for your industry while you keep a consistent structure across all interns.

Digital trail for audits and questions

All letters stored against each intern profile.
Central view of who is interning, where, and till when.
Simple export of documents if a regulator or college asks for proof.
One login for HR and founders to see the status of each program.

Instead of searching through email and scattered files, your team can show a clean history of what was promised and what was paid.

You can start with a small number of documents, test the workflow, and expand only when you see value.

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Internship compliance FAQ for Indian employers

Is it legal to charge interns or trainees any kind of fee?

It is safer to treat any fee linked to work experience as off limits. Charging for internships or paid training that is tied to a work role can be challenged as unfair and creates strong reputational risk. Many employers and colleges have moved away from this practice for that reason.

Do interns need to be added to PF and ESI?

Registered apprentices and trainees defined under standing orders are generally excluded. For other interns, the position is more nuanced. If they look like regular employees and receive meaningful monthly pay, PF or ESI authorities may question their exclusion. This is why a clear written role and limited duration help.

Can an intern later claim that they were in fact an employee?

Yes. In disputes, courts have looked at real duties and duration rather than labels. If the intern carried regular responsibilities for a long period, there is a chance that they can claim benefits that apply to employees. Clean documentation and well designed roles are your protection.

How long is too long for an internship?

Many employers keep internships within two to six months. Longer durations are more likely to be questioned, especially when there is no clear academic reason. If you want to continue with the intern for genuine work, you can shift them to a fixed term or probationary employee role with a proper offer using Offrd.

Can Offrd replace legal advice on internships?

Offrd helps you implement good practices and create consistent documentation. For complex or high volume internship programs, you should still take advice from a labour law expert and then lock in those clauses as templates inside Offrd.

This page is for general information for employers in India and does not replace specific legal advice. Where you have doubt, especially for long or large scale internship programs across multiple states, please consult your legal adviser and then use Offrd to operationalise those decisions in your HR documentation.

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