How do Stipends Work?
1. Purpose and Nature of Stipends: Stipends, despite sharing a similar structure with salaries in the form of fixed monthly payments, serve a distinct purpose. Stipends function more as financial aid. They support individuals involved in training or learning experiences, acting as training allowances rather than payment for services rendered. This distinction is particularly evident in the case of interns, who often receive stipends instead of traditional wages.
2. Regulations and Guidelines by the Department of Labor (DOL): The DOL outlines specific guidelines governing the utilization of stipends by firms. One crucial regulation prohibits companies from using stipends to replace existing employees with cheaper student labor. Instead, the primary aim of stipends should be the development and educational growth of the student, not the financial benefit of the company.
3. Modest Financial Assistance: Stipends are typically designed to cover basic living expenses during the period of learning or training. As such, they are often modest in amount. For instance, intern stipends might range from ₹10,000 to ₹15,000 per month, although exceptions may exist in certain cases. Despite their modest nature, stipends play a vital role in providing valuable financial support to individuals undertaking educational or training endeavors, easing the burden of living expenses during these experiences.