The investigation comes after northern newspaper Jornal de Notícias exposed the situation following a complaint from the President of the National Youth Council (CNJ), Hugo Carvalho.
According to the report some companies are demanding that trainees on internships supported by the IEFP devolve the slice of their salary covered by the IEFP, which uses EU funding and generally varies between 65 and 80 percent of the wage the youngsters should receive, and pay the TSU single social tax that employers should foot.
Jornal de Notícias claims that of the €691 a graduate intern can receive, in some cases up to €400 could end up back in the hands of their employers.
National broadcaster RTP spoke to a number of complainants who alleged employers had “invited” them to return part of their salaries as a guarantee they could have the compulsory internship which secures access to professional titles following graduation.
The IEFP is investigating the claims and has applied for alleged victims to come forward with names.
However, the CNJ is said to be reluctant to reveal the names of the companies involved in the schemes as the trainees are scared of reprisals, and the Council first wants guarantees the youths involved will not be punished.
A source from the IEFP told newspaper Público that the Institute has contacted the CNJ with a view to identifying the companies involved and to “understand the dimension of the problem” and said it will continue to make the contacts necessary to stop the alleged fraud.
“We are the first to want to know what is happening. It would be good if the CNJ named the people and companies who participated in these situations. If it knows of concrete cases then it should report them to the authorities, but unfortunately so far we have no such cases”, the source added.
Should it be proven, the alleged schemes could amount to fiscal crime or fraud to obtain public subsidies.
The CNJ is looking to hold talks with the government and the IEFP to guarantee the youths involved will not be penalised for denouncing the issue, and as yet does not want to formalise a complaint.
Only after assurances have been made for the alleged victims will the CNJ consider making the names of practices such as lawyers’ offices, architectural offices and psychology clinics – areas flagged as the most problematic – public.
Hugo Carvalho suggests the IEFP should send a letter to all subsidised interns asking whether or not they have given money to their employers.
Even without identifying suspected participants the IEFP, according to Público, can asks its auditing service to investigate and, should suspicions of fraud arise, it can then put cases forward to the Public Prosecutor for further action.
A report conducted by the Ministry for Labour released in June revealed that while professional internships have risen significantly in recent years, only 16 percent of interns stay in the company they were trained by.
And while 67 percent of former interns managed to secure a job within 12 months of completing their internship, only 38.8 percent returned to the job market without additional State support.