On the other hand, interns do not always contribute to a company’s bottom line, so the issue of whether or not they should receive a stipend and how much is fair remains debatable.
Last Friday, Prime Minister Anwar Ibrahim announced that interns at government-linked companies would be paid RM800 a month.
But in the private sector, there are no hard and fast rules on whether or not they should be paid, and if so, how much.
Recently, former youth and sports minister Syed Saddiq Syed Abdul Rahman said there should be regulations in place to ensure all interns are treated fairly.
He argued that interns merely want to be paid enough to cover their daily expenses while they undergo industrial training and they are not even demanding the minimum wage of RM1,500 a month.
Later, in response to allegations that interns at some ministries, government departments and agencies as well as private companies have not been paid while undergoing training, Anwar said he would examine any proposal to formulate special laws to protect them.
However, higher education minister Khaled Nordin pointed out that the government cannot force businesses to treat interns the same as employees.
Therefore it cannot ensure that they earn equal wages.
Syed Saddiq’s proposal for regulations has drawn mixed reaction. A student is adamant that regulations are essential to ensure interns are paid fairly but an academic believes market forces should be the determining factor.
Businesses, on the other hand, do not want any regulation.
Living allowance a necessity
Rashifa Aljunied, a final year student of international studies and strategies at Universiti Malaya said students are vulnerable and there must be proper legal safeguards to protect them.
“Young people are also struggling to make ends meet during their internship,” she told FMT Business.
She proposed that laws be put in place to determine how much an intern is paid based on the type of work, the duration and location of the workplace. “There should also be provisions for a minimum allowance,” she added.
She pointed out that in some regions, such as the EU, unpaid internships are banned.
Monash University Malaysia economics professor Niaz Asadullah said the government should not be expected to intervene in all aspects of the economy.
He said in countries such as Germany where internship has been formalised as part of technical and vocational education and training (TVET), interns perform specialised tasks. “But that is more like an apprenticeship,” he told FMT Business.
“So such decisions should be left entirely to interested employers,” he added.
Niaz pointed out that in Malaysia, internship remains an under-utilised hiring practice that, if scaled up, can be mutually beneficial for employers and job seekers.
Employers want a say
Small and Medium Enterprises Association (Samenta) chairman William Ng agrees that interns should be given a reasonable allowance to at least cover costs of transport and meals.
However, he told FMT Business, companies should be given the option to decide how much.
“A blanket minimum allowance will discourage companies from taking in interns. This will hurt the prospects of the interns who could otherwise benefit from early exposure to the actual work environment,” he said.
Ng said that while there are reports that interns are not given the right training and exposure, there also are cases of interns failing to follow instructions.
“(Some) interns are also unwilling to change their expectations of work life, or they abscond,” he added.
The way forward, Ng said, is for educational institutions to keep a database of prospective employers and to blacklist those that abuse the internship programme.
He said that at the same time, they should also manage the expectations of interns and to take disciplinary action against those who misbehave or drop out.
The Malaysian Employers Federation (MEF) told FMT Business the current practice of allowing employers the discretion to offer an allowance during industrial training should be retained.
The way forward
An internship offers new graduates valuable pre-employment experience that can ease the transition from studies to work.
However, the cost and benefit to employers is difficult to ascertain. For the most part, interns do not actually contribute to a company’s bottom line. Some companies even see it as an expense.
Some end up with undergraduates who lack the ability to think and solve problems. As Niaz pointed out, employers are unwilling to take them even if they are not paid.
Making it mandatory for interns to be paid a minimum allowance will also crowd out SMEs.
As a result, job prospects for new graduates diminish or they are forced to agree to accept low-paying jobs in the gig economy, Niaz concluded.