Unpaid internships have been getting a lot of media attention recently as a result of Lord Holmes of Richmond’s private members bill, which seeks to ban unpaid internships that last more than four weeks. A previous attempt in parliament to ban unpaid internships was blocked last November, but Lord Holmes reintroduced the bill earlier this year.
The argument in support of the ban is that unpaid internships, which are mostly used as a stepping stone into jobs, are a financial block to those who cannot afford to work without pay.
An internship typically takes place between completing further education and entering a profession. It aims to help those involved gain experience and provide an insight into the industry. Internships offer organisations a way to access talent, and provide interns with meaningful work experience that enhances their employability and skills. Internships can therefore be very valuable for graduates, as they allow them to learn on the job and explore their potential career options.
The number and range of internships in the UK has increased considerably in recent years and interns are now a regular feature in many industries. However, over recent years fears that interns are being exploited have grown, as some organisations do not know the obligations they are required to follow.
Internships remain something of a legal grey area, so it is critical that employers know the rights interns have. By failing to do so, an intern could satisfy the definition of a worker or even an employee under the Employment Rights Act 1996 and, as such, be entitled to be paid the national minimum wage (NMW). If this is the case, employers could find themselves receiving hefty fines, facing criminal prosecution or in receipt of an employment tribunal claim.
An intern’s legal rights depend on their employment status and whether they are classed as an employee, volunteer or worker. However, the legal status of interns is not clear-cut, given that there is a vast range of relationships. Some interns are purely voluntary; for example, students required to fulfil an internship for less than one year as part of a further or higher education qualification, or work experience students of compulsory school age, are not entitled to receive NMW. Others are clearly contractual and there are those that fall somewhere in between, which are difficult to define.
While it is important to look at each case individually, an intern is likely to be considered a worker if they are carrying out work of economic benefit to the employer, rather than simply shadowing someone for their own benefit.
Even if interns are not paid, they may still qualify as a worker if they are obliged to perform certain tasks and there is an expectation that they will personally undertake the work for the organisation. If an intern qualifies as a worker then they should normally be paid the NMW.
Once an individual is classed as a worker, depending on the relationship between them and the organisation, there is a risk that they could claim they are an employee and are therefore entitled to a host of employment rights.
Whether someone is a worker does not depend on what job title they are given: simply calling a person an unpaid intern or volunteer does not prevent them from qualifying for the NMW. Instead, and most importantly, whether or not the internship must be paid the NMW will depend on the nature of the work they are undertaking.
Natalie Spink is an associate solicitor at Your HR Lawyer