Social Development Minister Nelson McCausland brought the Jobseekers Allowance (Work Experience) Regulations to the assembly, on 2 July 2012.
The minister explained that the measure was designed to allow young people to take part in a work experience scheme whilst ensuring they remained eligible for Jobseeker's Allowance.
This scheme was designed to boost confidence and employability.
Mr McCausland attempted to address members' concerns about potential sanctions against young people who quit the scheme, or refused to take part.
He said only those who were asked to leave by a host employer due to gross misconduct would lose some benefits.
Social development committee chairman Alex Maskey of Sinn Fein said members had expressed a range of concerns at the regulations, and these were shared across party divides.
He said members were worried about the range of sanctions available for use against young people, and that his party would not support the measure.
Paula Bradley of the DUP supported the regulations.
"Within any work environment there are rules," she said.
Mark Durkan opposed the regulations on behalf of his party, the SDLP.
He questioned the minister's statement that sanctions would only be used by young people guilty of gross misconduct, saying this was not what was written in the legislation.
Replying to the debate, the minister said the scheme was entirely voluntary and that the young people could "walk away" at any time.
He added that the term "gross misconduct" could mean, for example, stealing, and racial or sectarian abuse.
The motion was carried by 42 votes to 37.