Graduate Students Summer "Internship" Management
Author: Eunice Hu
Editor: Spencer Whiskard
With the arrival of the summer vacation, many college students choose to look for internship opportunities. In order to find and cultivate talent, companies will also provide many summer internship positions. However, influenced by the general improvement in the threshold of the job market, companies will encounter those whom prefer to pursue a master’s degree after graduation from college and have already received the admission notice. These individuals may also apply for the summer internships prior to commencing their graduate studies. When companies recruit such graduate students as "interns", questions will arise as to whether graduate students can be recruited as interns, whether there will be any legal risks, and whether there are any special considerations in the process of using such personnel, etc. As for these doubts, there are no specific laws in existing labor legislation and regulations. This essay focuses on graduate students, discusses the legal relationship between graduate students and companies, reveals the common problems in daily management, and tries to analyze the solutions that companies can choose to avoid legal risks when encountering these kinds of issues.
1. Categories of the graduate students
The graduate students concerned in this essay mainly include the following three situations:
1. Students who have got a bachelor’s degree and will pursue a master’s degree in a domestic college immediately after graduation.
2. Students who have got a bachelor’s degree and will pursue a master’s degree abroad immediately after graduation.
3. Students who have got a bachelor’s degree and apply for a master’s degree abroad, however, due to the college requiring candidates to have achieved a certain level of professional/work experience, and the limited employment opportunities and resources in foreign countries, they decide to return back to China in order to seek suitable internships.
When these graduate students apply for summer internships, the first concern of companies is whether the graduate students and the company will be recognized as having labor relations, which is also the key point in analyzing a series of other issues.
2. The legal relationship between graduate students and companies during the summer “internship”
Actually, there are no definite legal regulations on the issue of whether students who will pursue master’s degrees after graduation are within the scope of “current students”, and whether their "internship" with companies during the summer vacation will be considered as labor relations, therefore, opinions are divided in practice. Some hold the view that, once students graduate from college and receive their diploma, they will no longer have the status of ‘student’. At this time, they have been endowed with the subject qualification required to establish labor relations when they provide labor for companies in the summer vacation after graduation. Others hold that students who are going to pursue master’s degrees after graduation have not yet fully entered working-society and therefore their pursuit of work for the purpose of increase professional experience should not be considered as establishing labor relations.
It is worth mentioning that throughout China's labor laws and regulations, except Article 15 of the Labor Law of the People's Republic of China, clearly prohibit employers from recruiting juveniles under the age of 16. There are no prohibitions on students becoming the subject of labor relations. Article 12 of The Opinions on the Implementation of Several Issues Concerning the Labor Law of the People's Republic of China is limited to the work-study programmes undertaken by students in school. Strictly speaking, students are not completely excluded from the scope of the subject of labor relations. There exist many landmark cases in different regions that support the view that college student interns and employers can be identified as labor relations under certain circumstances. The Supreme People's Court also issued a bulletin case in 2010, affirming the perspective that college students are qualified for establishing labor relations.
Based on the above, whether graduate students and companies establish labor relations during summer internships, we pose the point of view that labor relations shall be established according to the "three elements" of labor relations, in accordance with the law: the employee a) managed by the employer b) receives remuneration and c) provides labor, which is a part of the business of the employer.
While internships undertaken before graduation are considered work-study, interships undertaken after graduation but prior to graduate studies are not considered work-study due to the fact that they are temporarily outside of the college’s control and they are qualified in the work they are undertaking. They will have labor relations in this case.
If companies engage in recruiting graduate interns and directly manage the nature of their employment – if any labor dispute was to arise - is more likely to be recognized by the court and arbitration as being a labor and employment relationship. Therefore, companies need to pay special attention to the potential legal risks when using such personnel as "interns".
3. Matters requiring attention
The Factual labor relations
A factual labor relationship will be established from the date of employment, when the graduate student and company have formed a subordinate labor relationship, even if a labor contract has not been signed. Factual labor relationships (those without a contract) are deemed illegal and a legal penalty will be imposed for failure to establish a formal employment relationship which equates to twice the salary during the period of the factual labor relationship. If a factual labor relationship extends past one year, there is still the legal risk of it being regarded as a non-fixed labor contract.
Social security department inspection
If the company encounters a social security administrative department inspection or is subject to a complaint, and is identified as establishing labor relations with graduate students, the company will face an unfavorable situation. Social security administrative departments will impose a strict deadline within which the company must correct the situation and may even levy a fine for delaying the payment. If the company does not correct the situation before the deadline, it will face further penalties.
During the internship, it is inevitable that some accidental injuries will happen to interns. In practice, in cases where graduate students are identified as having established a labor relation with the company, they are often considered "work-related injury" accidents. If a graduate student suffered a serious injury during an “internship”, they may claim that a labor relationship exists in order to increase the company’s liability. If this is the case, a failure to pay the work-related injury insurance premium will entail that the company will need to assume the corresponding cost according to the standard of relevant work-related injury insurance.
Applying for long sick leave
Graduate students who suffer from a serious illness or chronic disease during the "internship" period are more likely to apply for a long sick leave. If a labor relationship is considered as existing, graduate students will be entitled to the right of medical treatment protection. Therefore, companies will be unable to terminate the labor contract in the short-term – at risk of legal penalities - which will not only have an influence on the operating department, but will pose a challenge to the HR management.
Not successfully enrolled
Although graduate students have received the admission notice or have exhibited a clear intention to pursue a master's degree, it is still possible that they suddenly change and choose to stay at the company. It is questionable whether the company still has the right to terminate the "internship" relationship.
4. Solutions to avoid legal risks
While there are some potential legal risks in recruiting graduate students as summer interns, must companies avoid recruiting graduate students as interns? The answer is clearly no. The followings are some suggestions for alternative solutions to avoid legal risks.
As a flexible employment mode, part-time employment can be terminated at any time without any severance. It is a solution for companies wanting to recruit graduate students as interns, who have no intention of employing people for long-term positions. Companies can flexibly choose to recruit graduate students in the form of part-time employment according to their actual needs, but companies must note the limitations on working hours and social insurance payments. Throughout the relevant provisions of "Opinions on Some Issues of Part-time Employment" and "Social Insurance Law of the People's Republic of China", companies should pay the work-related injury insurance premium for part-time employees on time, and urge part-time employees to pay the basic endowment insurance and medical insurance individually. It is also suggested that companies should clearly define part-time employment relationships by signing part-time contracts with graduate students, so as to effectively avoid the risk of being recognized as labor relations.
Signing a service contract
It is clear that graduate student summer vacation "internships" are usually temporary, neither students nor companies are intending to maintain a long-term stable labor and employment relationships. At this time, an equivalent exchange of labor and remuneration is formed between the two parties, rather than a subordinate relationship. Thus, when companies recruit graduate students to participate in summer "internships", they can choose to establish a service contract on certain labor services or labor results by way of ‘equal negotiation’, and effectively distinguish contract employees from regular employees in daily management, which is also an effective method to reduce litigation risks. Likewise, in order to avoid the risk of paying " work-related injury " compensation, we suggest that companies should purchase "employer liability insurance" to avoid this kind of risk.
Signing a labor contract
Due to having graduated from college, graduate students are already equipped with the subject qualification necessary to be an employee. If graduate students in a summer "internship" have normal attendance, accept daily employment management, and a certain management relationship between the two sides has formed, that is, conforming to the essential characteristics of labor relations, the possibility of it being identified as labor relations will be greatly increased. In this case, the company may, of course, consider the actual demands of job recruitment, sign a fixed short-term labor contract or a labor contract that expires at the completion of a certain task with a graduate student.