Many organisations across the UK rely on unpaid labour in the form of interns each year. Gaining experience in a relevant field, making industry contacts or even securing a job could be invaluable to their future career. So where is the issue if both parties are benefiting from the arrangement?
What is an internship?
An internship is a form of work experience, often undertaken by university students or graduates. The length and arrangements for internships vary greatly and there is no formal definition of an ‘intern’ under UK law. Whether an intern is entitled to be paid for their work, and gains other employment-related rights, will depend on how the relationship is managed.
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Values led organisations may want to consider whether it is ethical to have individuals working in their business with no pay. Whilst some employers may feel that the non-financial benefits of completing the internship far outweigh this, the 2017 Taylor Review boldly described unpaid internships as an “abuse of power by employers and extremely damaging to social mobility”.
Following the Taylor Review, the government set out guidance to make the position and rights of interns clearer.
Students that can fully commit to their internship will achieve better results for your business. If the internship is unpaid, that student will realistically have to juggle a part time job or incur debt because unless they are financially supported, students will still need to find a way to pay their bills. This may result in a restriction to the pool of talent that can take part in your internship, directly in conflict with many organisations equality, diversity and inclusion (EDI) strategies.
National Minimum Wage
How the relationship is set up and how the employer and intern interact will determine whether the intern is a worker, simply calling them a volunteer or unpaid does not create an exemption from the duty to pay NMW:
- Where they are only shadowing and not carrying out work, they will not be a worker and will not be entitled to the NMW.
- If they are working on a genuinely voluntary basis and do not receive any financial reward or benefit in kind for the work they perform, they will likely not be a worker and therefore not be entitled to the NMW.
- If they are carrying out work and the employer exerts some control over the way that they perform their work (for example, a requirement to work set hours or days), it is likely that they will be a worker and entitled to the NMW.
Failing to correctly pay NMW can result in an employment tribunal and significant fine by HMRC in addition to the potential for bad publicity.
Interns are usually university students and therefore over the age of 18. However, if you do create opportunities for younger interns, ensure that the adjusted requirements of the Working Time Directive are incorporated. The adjustments include a shorter working patterns and longer breaks. Find out more about working time here.
How to get it right
On balance, organisations may consider offering paid internships makes better business sense. Paid internships have the potential to be more mutually rewarding to both parties and will help remove the barrier of social mobility from an EDI perspective. If you are thinking of creating internship opportunities, take a moment to consider the purpose, how it will work in reality and therefore whether NMW will apply. Our expert HR consultants can support you with this.