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Start-ups and Interns: A win-win relationship

As a start-up attempting to grow you are facing a challenging situation: you must continue your investments, increase your work output and preserve the ability to pursue several leads in parallel while remaining responsive. Yet you must also keep tight control of your cost structure and remain flexible. Preserving your ability to quickly adapt to changing circumstances is indeed essential to face the market efficiently.

A wannabe intern, in turn, is seeking to learn and to gain professional experience but is often used as low-cost administrative work force, spending months and months sorting mail and organizing folders. Joining a dynamic Start-up with a large variety of tasks to be performed is a great opportunity for him/her, which will generally be repaid in enthusiasm and dedication.

Some key elements to be considered are:

  • The internship is not analysed as an employment contract so that most provisions of the Labour Code are not applicable. It is an educational relationship, so the employer must ensure the educational relevance of the tasks performed by the intern (practically that is almost always granted)
  • The only Labour Code provisions applying are: duration of work, sexual harassment, health and safety at work, occupational health service (including medical check), and specific dispositions for young workers (below 18)
  • As a consequence, a salary or even a minimum wage are not required. In practice though, (quality) interns will always receive at least 600 Eur. A compensation of about 1000 to 1200 Eur can allow you to attract graduates from some of the best French or belgian business schools. An exemption from withholding tax can be asked to the competent tax office for the first six months of the internship
  • There are no prescriptions in terms of age of the intern, nor in terms of the duration or renewals of the internship. To conclude an internship contract, the person must only be registered with its school (in Luxembourg or abroad)
  • As regards to social security, trainees who are not covered by accident insurance in their country of residence are considered as salaried workers. The same solution applies when the internship is concluded for more than 3 months. In those situations, you must register the trainee with all social security branches by submitting an entry declaration to the Joint Social Security Centre
  • There is no limitation as to the amount of interns that can be hired by a single company
  • An internship contract can generally not be terminated before its term, unless both the intern and the employer agree in that respect

It is clear that the internship contracts are an excellent compromise for Start-ups. Easy to implement, cost-effective and flexible. It has the potential to substantially reinforce your human resources capital while minimising your risks. However, you must keep in mind that your interns are not employees, so you cannot expect or impose efficiency or productivity measures, KPis or other management tools to them. (If you do not, the internship could be reclassified into an employment contract by the Labour Inspectorate).

In conclusion, many pros and one con: the risk of hiring an intern that is not in tune with your companies’ goals, hence the importance of a thorough selection process.

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