How Much Are Interns Paid? Internship Stipend Advice

Are interns paid fairly for their work? What does an internship pay?

Are Interns Paid?: What Do Internships Pay in South Africa?

Why Are Internships Paid Anyway?

First off, internships should get paid. Regulations for Internships can be expected to be tightened to reduce youth exploitation. Many firms advertise internships to recruit qualified young talent cheaply. 

Exploring the question “Why are interns paid?” is about the importance of valuing interns’ contributions. Some employers say these learners should pay them for the privilege of practicing a real job at a real organization!

Arguments for paying an internship stipend include:

1. Fair compensation: Work on internships is often the same as work performed by paid employees, and the same full-time hours. It is therefore argued that they deserve to be paid for their work.
2. Cost of living: Internships can be costly for youth, who often have to cover their own expenses such as transportation and housing. A stipend can help offset these costs.
3. Encouragement of diversity: Internships without stipends can be prohibitively expensive for youth from low-income backgrounds, effectively limiting opportunities to only those who can afford to work for free. Paying an internship stipend can help increase diversity in the workplace.

Arguments against paying an internship stipend:

Learning experience: Some employers argue that internships are primarily learning experiences, and that paying interns would change the nature of the relationship between the learner and the employer.

Cost to employers: Employers may not want to pay a stipend, as this would increase the cost of the internship program.

Ultimately, whether internships deserve to be paid a stipend depends on the specific circumstances and the laws and regulations where the internship takes place. In some countries and industries, internships are legally entitled to a minimum wage, while in others, internships may be unpaid.

Internships Should Pay Because That’s Fair Practice

In South Africa, we encourage the practice of paying internships as the rates of unemployment and inequality are extremely high.

Learners must be wary of employers who advertise internship opportunities and don’t declare what the payment is before an interview.  Withholding pay information is a common industry practice used to get you to agree to the least possible amount and to find talented, vulnerable candidates. 

Companies like Truworths try to convince you that your skills are worth a limited amount and that you are very fortunate to be considered for “a wonderful opportunity.” Don’t believe it. Many organisations have horrible cultures and youth are better off developing a vision for a self-employed future.

For queries relating to industry payments, the Department of Labour and relevant SETAs should be contacted for clarification.

What should Employers Pay for Internships?

The most important benefit an employer can offer for an internship is a highly educational experience that provides access to top-level employees, and industry experience.

That being said, payment is important to set the position apart from the status quo and attract the best candidates. A minimum wage or even a simple stipend can radically improve the quality of applicants to an internship. In addition, pay improves intern morale as well as provides a great incentive for interns to take more responsibility and do better work.

Internships are Entitled to Pay Transparency

Interns want to learn and contribute without fear of exploitation. I am vehemently opposed to companies that advertise Internships without stipulating how much the position is worth. An inexperienced applicant is unlikely to have the negotiating skills to pose an argument for a fair stipend so I believe it’s unprofessional for someone to ask them ‘how much do you want to get paid.’

Internship stipends should be included in  recruitment adverts so that applicants can self-target (decide beforehand if the opportunity is worth applying for.) I’ve met many HR practitioners who argue against this, leave your thoughts below in the comments section!

My advice to companies is to pay what the SETA funds and to top it up further.

Are Internships Paid According to Legislation?

What the DoL says about Internships

The Department of Labour brought in new laws to develop the skills of the citizens of our country:

• The Skills Development Act, 1998 and Skills Development Levies Act, 1999.
  • Employers contribute money through a skills levy, to ensure funding is available for skills development.
  • New skills development and work experience programs were also developed by the Department to raise the employability of the citizens of South Africa. One of these work experience programs is called internships.

What SETAs Say About Internship Pay

The best information was found on the Services SETA website.

THE SERVICES SETA INTERNSHIP PROGRAMME

The Services Seta decided to conduct an Internship project for learners who completed their training and still lack workplace experience before they can be employed.
The following processes were identified for Vocational and Tertiary Institutions that intended to be part of this project:

• The Services SETA will invite employers to accommodate 6 month internships.
• The internship programme will include specified activities to be completed and evidence to be gathered in a Portfolio of Evidence, for internal assessment after completion of the internship.
  •  Workplace coaches/mentors will assist Interns during the workplace experience and the gathering of workplace evidence for their portfolio of evidence.
  •  Internships pay a stipend for the period of 6 months.
  • Subjected to Services SETA’s discretion.

How Much Services SETA Pays for Internships

• R 18 000 (R 3 000 per month for 6 months)
• Employers will be allowed to top this amount up if they so wish, but this is not compulsory. The payment of the above allowances will be made to the employer and the employer must pay the learner.
• If a Learner is disabled an additional disability grant of R 1 500 per month for 6 months is available.
• The Employer shall receive an internship grant of R 1000 (one thousand rands) per learner for the duration of the internship, payable with each tranche payment of the total grant
• Please note that if th learner leaves the workplace of the company, the company will only receive a pro-rata payment for the months the Internship was in place.

Internship Payment procedure

• Employers will have to complete the funding application form for internships and submit it to the Services SETA. (LIM F010)
• The companies will have to complete the attendance register (LIM –F012) for the internship on a daily basis for the duration of the six months.
• The Employers will have to ensure that learners complete the POE and that they collect the necessary proof of workplace experience.

Funding Disbursement for Internships

 35% of the total grant shall be disbursed to the employer on receipt of the following documents:

• The Funding application; (LIM F010)
• The SSETA/Employer Agreement; (SLA)
• Internship Information Form; (LIM F029)
• Certified copy of the intern’s qualification;
• Their CV and identity document.
• Vendor Form –(PROC F034) with all attachments as per the checklist
• Current and Original Tax Clearance Certificate
• HET/FET agreement
• Intern Template
• Invoice for 35% of the internship project
• 35% of the total grant shall be disbursed in Month 3 of the internship on receipt, verification and approval of the following documents:
• Attendance registers confirming attendance in the first two months of the programme;
• Proof of workplace experience obtained over the previous two months;
• Proof of payment of the stipend containing an acknowledgement of receipt of the stipend with the intern’s signature.
• Invoice for 35% of the internship project
• The final 30% of the total grant shall be disbursed in month 5 of the programme on receipt of the following documents:
• Attendance registers confirming attendance in the second two months of the programme;
• Proof of workplace experience obtained over the previous two months;
• Proof of payment of the stipend containing an acknowledgement of receipt of the stipend with the intern’s signature.
• Invoice for 30% of the internship
• The Employer shall submit the supporting documents in respect of Month 6 for purposes of reconciliation and issuing of the Certificate of Workplace Experience by the Learnerships Division. Failure to submit these documents will result in the SSETA claiming the money paid in respect of the last 2 months of the internship.

That’s pretty much the best direction I could unearth about Internship payments.

Who funds Internships?

The Department has established internship programmes that are funded through Sector Education and Training Authorities (SETAs). Many companies also host independent internships that they don’t receive SETA grants for. While plenty of these companies are genuine, many are exploitative.

SETAs are organisations that ensure training of good quality happens in each sector of the economy, e.g. construction, tourism, agriculture or health sectors. The SETA receives money that was gathered from employers to upskill the nation and then pays the money in the form of a grant to employers, to employ unemployed people for internships.

Which Internships are Preferred for Funding?

Scarce Skills!!!!

SETAs prefer funding internships for scarce-skill occupations.

Sometimes the opportunities for internship funding will be for people with a qualification in a scarce skill only. Take a look at how the ETDPSETA is addressing hard-to-fill vacancies in 2023 at this link.

A scarce skill is an occupation that is in short supply and needed in the labour market to make the country move ahead, e.g. certain occupations in health, such as doctors. Work-seekers will notice that the Department encourages the unemployed to further their studies in scarce skills, by making more funds available for these occupations. The reason is to help them find a job and to help the country meet its human resources needs. DoL

Internships are perfect for Unemployed Graduates

1. Unemployed people can apply for an internship if an employer is calling for applications.
   1. Employers advertise in newspapers or place adverts in the community, city or town. Work-seekers should therefore watch for these adverts.
   2. The Department encourages the unemployed to further their studies in scarce skills and makes more funds available for these occupations.
   3. This means that the SETA will be attracted to funding companies that offer internship opportunities for scarce skills.
   4. This is because it’s more likely that with some experience and coaching, these interns’ chances of employment become higher.
2. Unemployed people can also apply at the nearest Labour Centre for an internship opportunity.
   1. The internship opportunities will be available on a computerized job-matching system, the Employment Services System of South Africa, (ESSA).
   2. By providing their details to the staff at Labour Centres, work-seekers can be matched to the opportunities, when these arise.
   3. The Labour Centre staff can then inform them about the opportunities.

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