Employment law: Unpaid internships, are they legal?

Employment law: Unpaid internships, are they legal?

A recent survey conducted by Graduate Prospects found that nearly half of all university students undertaking internships are unpaid.

Mike Hill, chief executive of Graduate Prospects, said: “Despite the hype around unpaid work experience placements over the last few years, we can see from the study that a huge proportion of interns still have to work for free.”

These days, it is important to be able to show that, in addition to good academics, relevant professional experience has been gained through an internship. Equally, internships allow employers to gain an insight into whether candidates are likely to be suitable for a particular role within their organisation and to recruit them accordingly. They also enable them to utilise the skills of the intern in a cost-effective manner.

However, whether or not unpaid internships actually comply with relevant UK law is questionable.

Are employers breaking the law by taking on unpaid interns?

Employers taking on unpaid interns on the basis that both parties understand that it is an unpaid, expenses-only position, may believe that they are entitled to do so under the UK National Minimum Wage legislation. However, National Minimum Wage legislation says that all workers in the UK who are over 16 are entitled to be paid at least the National Minimum Wage, unless they are covered by a particular exemption within the legislation. The only exemptions relevant to internships are:

  • students undertaking work placements as part of higher education of up to one year; and
  • volunteers, who are under no obligation to perform work, have no contract, can come and go as they please, and have no expectation of and do not receive any reward for the work they do.

Therefore, many students in full-time education are finding themselves exploited by unscrupulous companies. However, if an internship involves real work on the part of the intern, rather than genuine work-shadowing (which many do, particularly in law firms), then the intern will fall within the legal definition of ‘worker’ under National Minimum Wage legislation and should be paid in line with the law.

What are the potential implications?

If, as it seems, some unpaid internships are illegal, then many organisations appear to be getting away with it as a result of a failure to enforce the law. It also means that if interns (both current and future) were to make claims for compensation to Employment Tribunals and the law was enforced, employers would be liable for a significant amount of back pay. However, it is unlikely that interns who are looking to establish a career will sue employers, as this would be unlikely to do them any favours when they look for a permanent job.

If unpaid internships do continue then arguably there is going to be an unfair advantage in the graduate employment market on young graduates from wealthy backgrounds, as they will be the ones who can afford to support themselves whilst undertaking unpaid internships in order to enhance their curriculum vitae. In turn, this could lead to certain jobs becoming predominantly middle class.

If you have undertaken, or are going to undertake an unpaid internship in any job sector, you may wish to speak to an local employment solicitors first to clarify your rights in relation to remuneration, as this will depend heavily on the terms of your particular internship.

Related links:
Read more on the story (Guardian)
Read articles about the National Minimum Wage (FindLaw)
Find local employment solicitors throughout the UK (FindLaw)

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