Campus Hiring, Internships and Apprenticeships
An intern, an apprentice and a trainee are three different things, and only one of them has a clear statutory identity. Getting the classification wrong is how a campus programme built for goodwill turns into an employment claim. This guide covers the employer side of campus hiring and the legal difference underneath it.
- The employer side of a campus process
- Apprenticeship: obligations, band and stipends
- Why an apprentice is not a worker, and one broken cross-reference
- Intern, trainee and employee, and what actually decides it
- The incentive schemes currently running
Employer side, and where it usually goes wrong
A campus programme is a supply chain, not a series of events. The institutions chosen determine the candidate pool far more than the assessment does, and choosing them by ranking rather than by where your successful hires have actually come from is the most common structural error.
Three practical points. First, offer-to-join conversion is the number that decides whether the programme worked, and it is largely determined by what happens between the offer and the joining date, which is often six to nine months later and is usually a period of silence. Second, an assessment designed for experienced hires measures the wrong things in a graduate, who has no track record to assess; measure aptitude and trainability against the role, and be able to say what each element predicts. Third, decide before the process starts whether you are recruiting employees, engaging interns or taking apprentices, because the three are different legal arrangements and cannot be sorted out afterwards.
The candidate-readiness side of this, which is work we do with institutions and sponsors rather than with employers, sits on our employability skills page.
The one arrangement with a clear statutory identity
The Apprentices Act, 1961 survived the Labour Codes. It appears in none of the four repeal schedules, and the Occupational Safety Code refers to it expressly when defining employee, which only makes sense if the Act is live.
Its coverage was expanded in September 2025 and the expansion is close to economy-wide. S.O. 4072(E) of 3 September 2025, issued by the Ministry of Skill Development and Entrepreneurship under section 1(4)(a) and published by the Directorate General of Training on 15 September 2025, supersedes G.S.R. 479(E) of 30 June 1999, replaces the former enumerated schedule of industries and specifies industries by reference to the sectoral structure of the National Industrial Classification 2008. The notified coverage now extends across agriculture, forestry and fishing; mining and quarrying; manufacturing; electricity, gas, water, waste and construction; wholesale and retail trade; transport and storage; accommodation and food services; information and communication; finance and insurance; real estate; professional, scientific and technical services; administrative and support services; public administration; education; healthcare and social work; arts, entertainment and recreation; other services; activities of households as employers; and extraterritorial organisations.
Sectoral inclusion is not the same as an obligation to engage apprentices. The establishment still has to satisfy the Act and the rules, including the workforce threshold below. The presence of the households category in the classification does not mean every household must engage an apprentice, and that is how the change is being reported in places.
| Point | The position |
|---|---|
| Who must engage apprentices | Establishments with a workforce of thirty or more, counting regular and contract employees, are required to undertake apprenticeship programmes. Between four and twenty-nine it is optional. With three or fewer it is not permitted |
| How many | Between 2.5 per cent and 15 per cent of the total strength of the establishment including contractual staff, with a minimum of 5 per cent of the total reserved for fresher apprentices and skill certificate holders |
| Who pays the stipend | The establishment, monthly, at not less than the prescribed rate. During basic training the rate is 50 per cent of the prescribed stipend |
| Minimum stipend rates | Class 5 to 9 pass: 5,000 rupees. Class 10 pass: 6,000 rupees. Class 12 pass: 7,000 rupees. Certificate or diploma holders: 7,000 to 8,000 rupees. Graduates: 9,000 rupees |
| Government support | Under the National Apprenticeship Promotion Scheme, 25 per cent of the prescribed stipend is reimbursed, subject to a maximum of 1,500 rupees per month per apprentice |
Source: the official National Apprenticeship Promotion Scheme frequently asked questions, read 1 September 2026.
The status point is the one that makes apprenticeship attractive and is worth stating precisely. An apprentice undergoing training in a designated or optional trade in an establishment is a trainee and not a worker, and the provisions of labour law do not apply to them in that capacity. Employers registered under the Act are exempted from provident fund and employees' state insurance contributions for apprentices they engage.
There is one exception, and its statutory reference has moved. If an apprentice suffers personal injury by accident arising out of and in the course of training, the employer remains liable under section 16 of the Apprentices Act. That section used to import the Employees Compensation Act, 1923, which was repealed on 21 November 2025, so the reference is now read, through section 8 of the General Clauses Act, as importing section 74 and the rest of Chapter VII, sections 73 to 99, of the Code on Social Security. The official frequently asked questions still cite the 1923 Act and have not been updated.
The route matters as much as the destination. An apprentice engaged under the Apprentices Act is generally outside the Code definition of employee, so the entitlement does not arise because the apprentice independently qualifies. It arises because section 16 specifically imports the statutory injury-compensation regime, whatever that regime currently is.
The same broken cross-reference problem sits in section 14. It applies the health, safety and welfare provisions of the former Factories Act, 1948 or Mines Act, 1952 depending on where training happens, and both were repealed by the Occupational Safety Code from 21 November 2025. Those references are read the same way, as references to the corresponding provisions of that Code. The Apprentices Act itself is untouched: the trainee status in section 18, the apprenticeship contract, stipend, training and examination requirements and the exclusions from bonus, provident fund and state insurance all continue in substance.
Intern, trainee, apprentice, employee
Of the four, only the apprentice has a clear statutory identity: someone engaged under a contract of apprenticeship registered under the Apprentices Act, expressly not a worker. Intern and trainee have no statutory definition in Indian law.
What that means is that the classification is decided by the substance of the relationship rather than by the label on the letter. The questions that decide it are the familiar ones: who controls how and when the work is done, whether the person is integrated into the business or observing it, and whether the arrangement primarily delivers training to the individual or output to the organisation. An internship in which the person does the same work as a junior employee, under the same direction, to the same deadlines, is employment described as an internship.
An internship stipend is not automatically exempt from provident fund, state insurance or income tax. Intern and stipend are labels; the legal character of the arrangement controls. The statutory exclusion belongs to a person validly engaged as an apprentice under the Apprentices Act, who is a trainee and not a worker under section 18. It does not extend because an employer calls someone an intern. Where the arrangement is in substance employment, regular productive work under the employer direction and control, prescribed hours, integration into the business and recurring remuneration, the intern should be treated as an employee and the stipend forms part of the contribution base, subject to the ordinary coverage conditions. A genuine educational or observational placement, where the participant is primarily being trained and is not obliged to provide productive service, falls outside, and the agreement, curriculum, supervision and actual conduct have to support that rather than the title. A borderline programme should not be described as exempt: if the business gets ordinary work out of the intern, payroll treatment is the safer position.
| Character of the payment | Withholding treatment |
|---|---|
| Payment arising from employment, FY 2025-26 | Salary. Withholding under section 192 of the Income-tax Act 1961 on estimated salary income at the applicable average rate. There is no separate stipend rate |
| Payment arising from employment, tax year 2026-27 onward | Salary. Withholding under section 392 of the Income-tax Act 2025, on the same basis |
| Genuine scholarship granted to meet the cost of education | Exempt under section 10(16) of the 1961 Act, and under section 11 read with Schedule II, Table serial number 9 of the 2025 Act. Calling compensation for work a scholarship does not secure the exemption |
| Independent professional or contractual services | Not salary. The non-salary provision applies only if the nature of the service, the payer and the threshold conditions are met: principally section 194J or 194C under the 1961 Act, and section 393, Table serial number 6 under the 2025 Act |
| Genuine training allowance that is neither salary, scholarship nor consideration for services | May still be taxable in the recipient hands as income from other sources, but there is no freestanding withholding provision merely because the payment is called a stipend |
This is a classification test, not a general exemption for interns.
The safe design is to make the arrangement genuinely what it claims to be: a defined training programme, with a learning plan, a mentor, an end date and work that is developmental rather than substitutional. That is also, as it happens, the design that produces conversions.
Two schemes worth knowing about, with their limits stated
The Prime Minister Internship Scheme no longer runs in numbered rounds and the figures have changed. Round two of the original pilot opened in February 2025 and closed, after extensions, on 31 March 2025. The revised scheme operates through a rolling model for FY 2025-26 and FY 2026-27, with participating companies posting opportunities carrying their own application, joining and completion dates, so there is no single round that can be described as currently open. Availability has to be checked on the scheme portal on the day.
Monthly assistance is now ₹9,000, not ₹5,000. The company pays ₹900 per intern per month, being ten per cent, from its corporate social responsibility funds or its own funds, and the Central Government pays the remaining ₹8,100 by direct benefit transfer after the company records its payment on the portal. The Government share is reduced proportionately where the company pays less than ₹900 for attendance or policy reasons. Payment and upload must happen before the fifth of each month. A company may pay more than ₹900, but the excess comes from its own funds. The old ₹5,000 arrangement, ₹500 from the company and ₹4,500 from the Government, was the 2024-25 pilot and must not be used for a new placement; the ₹9,000 terms were extended from March 2026 to interns still running under the earlier rounds.
Internships now run six or nine months depending on the role, sector and company, with interns from the earlier pilot keeping their original twelve. At least half of the internship must be actual workplace experience rather than classroom instruction. On joining the scheme an employer registers as a partner organisation and posts genuine opportunities, selects through the portal, issues the prescribed offer and completes joining and verification there, provides induction, training, supervision, a workplace and a named mentor, maintains attendance and performance records and keeps joining, attendance, dropout, termination and completion updated, pays and reports on time, facilitates the insurance formalities and the portal grievance and safety requirements, and issues the completion certificate. The company remains responsible even where the placement sits with a group company, a supplier or another entity in its value chain, and participation creates no obligation to offer permanent employment.
The employment linked incentive scheme, the Prime Minister Viksit Bharat Rozgar Yojana, is live. It took effect on 1 August 2025, the portal is operating, and the Press Information Bureau confirms that the first instalment was to be released by the end of March 2026.
It covers employees joining between 1 August 2025 and 31 July 2027, both dates included, whose gross monthly wage at joining does not exceed ₹1 lakh. Gross wage means the emoluments payable under the contract, while the incentive is calculated on the lower provident fund wage actually remitted.
Part A is one month average provident fund wage capped at ₹15,000, not a flat ₹15,000. It goes to a first-time employee: someone joining in the window who was not previously a contributing provident fund member, with an Aadhaar-authenticated universal account number and a first contribution reported for August 2025 or later. The first instalment is half the average wage of the first six completed wage months, capped at ₹7,500, after six months of continuous employment. The second uses the average of the first twelve completed wage months less the first instalment, capped in combination at ₹15,000, and requires twelve months of continuous employment and completion of the prescribed financial literacy programme; it is placed in a designated savings instrument for a prescribed period. Contributions for all twelve months must be filed within eighteen months of joining, and the benefit does not travel with the employee to a second employer. A completed wage month is counted specially: joining on or before the fifth counts that calendar month, joining after the fifth starts from the next.
| Monthly provident fund wage | Part B employer incentive per eligible employee |
|---|---|
| Up to ₹10,000 | 10 per cent of provident fund wage, capped at ₹1,000 |
| Above ₹10,000 and up to ₹20,000 | ₹2,000 |
| Above ₹20,000, gross wage not exceeding ₹1 lakh | ₹3,000 |
Part B is a wage-linked ceiling, not a flat 3,000 rupees for every additional employee, which is how it is usually reported.
The calculation is not the number of new joiners multiplied by those figures. The authority first identifies eligible employees and the establishment net additional employment above its baseline, then applies the prescribed average incentive calculation to that net figure. The incentive runs for two years generally and four for qualifying manufacturing establishments, and an additional employee must be sustained for at least six months before the related employer incentive becomes payable. First-time employees and eligible re-joiners both count.
The additional-employment minimum is two where the baseline is below fifty employees and five where it is fifty or more. These are continuing tests, not a one-time hiring target: the increase has to be maintained above the baseline. For an establishment registered before 31 July 2024 the baseline is generally the average reported for the twelve months from 1 August 2024 to 31 July 2025; for one registered between those dates it is the average of the applicable months to 31 July 2025; and a new establishment registered during the window has a baseline of twenty. The employer must also furnish PAN, GST registration and a PAN-linked bank account, file accurate monthly returns and pay contributions, get universal account numbers Aadhaar authenticated through face authentication, report gross wages, provident fund wages and joining dates correctly, and stay compliant throughout.
Both schemes are worth building into a campus plan where they fit, and neither is worth building a plan around, because a scheme with a window is a scheme with an end date.
Where these pages stop
These pages cover the window between deciding you need someone and getting them onto the payroll. Developing the people you already have is covered on our learning and development page. Preparing candidates to be employable, which is work we do with institutions and sponsors rather than with employers, is on our employability skills page. Everything after the first payslip, including provident fund and other statutory administration, is on our payroll services page.
Questions about campus and early careers
Is an apprenticeship cheaper than hiring a graduate trainee?
On direct cost, usually, because of the stipend rates, the exemption from provident fund and employees' state insurance for apprentices, and the reimbursement under the promotion scheme. That is not a reason to describe a trainee role as an apprenticeship. The arrangement has to be a real registered apprenticeship in a designated or optional trade.
How long should the gap between offer and joining be?
Whatever the academic calendar requires, but it has to be managed rather than endured. Conversion losses in that window are the single largest source of waste in campus hiring, and they are mostly a function of the candidate hearing nothing.
Can interns be asked to sign confidentiality and intellectual property terms?
Yes, and they should be, particularly on intellectual property where the intern produces work that has value. The terms should be proportionate to a short engagement rather than lifted from a senior employment contract.
Where to go next
Talent Acquisition
Back to the main page: how we recruit, what we take on, and how to reach us.
Hiring Under the Labour Codes: What an Offer Must Now Say
What actually commenced on 21 November 2025 and what did not, the appointment letter that is now a statutory obligation, the redefined meaning of wages and what it does to a salary structure, and the registrations a first hire triggers.
Executive Search and Senior Appointments
Leadership hiring where the appointment is also a corporate act: key managerial personnel, director appointments and the checks that precede them, and the independent director databank and proficiency test.
Contract Staffing, Fixed Term Employment and Gig Workers
The three non-permanent routes and when each is lawful: fixed term employment and its one-year gratuity, contract labour at the raised threshold with the core activity prohibition, and the aggregator obligations now live for platform work.
Screening, Background Verification and Candidate Data
What may be checked and what may not, the data protection regime that is commencing in phases rather than all at once, and the difference between an applicant and an employee that the statute does not clearly resolve.
Send an enquiry
Tell us the volume, the roles and whether you are considering apprenticeships. The classification question is worth settling before the campus calendar starts rather than during it.
Position as at 17 September 2026. Reviewed every six months.
This page is general information, not professional advice. Indian employment law is in the middle of the largest transition it has had in seventy years. The four Labour Codes commenced on 21 November 2025, two of them only in part, repealing twenty-nine central Acts. New central rules under two of the Codes were notified in May 2026 and new provident fund and pension schemes in June 2026, one of which was corrected in August 2026. The Digital Personal Data Protection Act is commencing in phases that run to 2027. Several positions on these pages are marked as unresolved because the primary source could not be read, and a page that pretended otherwise would be worth less than one that says so. Take professional advice before acting on anything on this page. We are happy to be that adviser, but we do not act on a web page, ours or anyone else's, without one.