Employers using unpaid interns fall foul of minimum wage

Employers who use unpaid interns are being warned they could be breaking the law and flouting national minimum wage legislation.

The warning comes as 100 employers have been referred to HM Revenue & Customs (HMRC) by the employment minister Jo Swinson following a campaign by Intern Aware, to raise awareness of the practice.

The employers will be investigated by HMRC under the National Minimum Wage Act 1998, which requires workers to be paid the national minimum wage, currently £6.19 per hour for over 21’s.

Branding unpaid internships for young people as “exploitative and often illegal”, Intern Aware are pushing for payment for all work experience placements.

The employment minister has supported the campaign, saying that: “There is a significant problem in society where people are being exploited for no money when they should be being paid.  We have got to change attitudes and make sure companies realise it is not appropriate. Where there is a job that needs doing, then it needs to be treated as a job and not be done be someone who is not being paid. This attacks the national minimum wage.”

Following the move, the Department for Business, Innovation and Skills has urged any unpaid interns who feel they are being exploited to contact the Pay and Work Rights Helpline.

Explained employment law expert  David Hetherington  of Grant Saw Solicitors in Greenwich :   “We are seeing an increasing number of employers who are worried about possible HMRC investigation if they offer unpaid work experience placements.   The problem arises because of a grey area around the difference between a genuine short term work experience placement, designed to give a young person a brief flavour of a particular job, and a longer term placement where there’s a real role which attracts a right to payment, but the intern isn’t getting paid.”

He added: ”The problem is compounded by a lack of clear guidance from HMRC, but employers need to get their house in order and make sure they’re not flouting minimum wage legislation.”

This is not legal advice; it is intended to provide information of general interest about current legal issues.