Pay for interns?

Alan Price – CEO at BrightHR

November 21 2016

A draft legislation to ban unpaid internships has been debated in Parliament, but failed to be passed Should unpaid internships be banned? In a recent report the government were said to be proposing the introduction of a ban on unpaid internships. This issue has been discussed before, but a statutory ban has never raised the required support to be pushed through Parliament. Will it now? A Parliamentary backbencher recently introduced a draft legislation which would have made it law to pay interns the National Minimum Wage or National Living Wage, depending on the age of the intern. Amongst others, the political and fashion industries are prominent in the use of unpaid internships, which they argue offer invaluable work experience to individuals from affluent backgrounds. However, interns also come from poorer backgrounds, and these people cannot afford to work for free for long periods of time. The National Minimum Wage (Workplace Internships) Bill was debated in Parliament, but the session ended with the Bill being ‘talked out’ by MPs so the proposal could not be voted on. Those against the bill warned that any reform would:
  • Increase financial pressure on businesses
  • Lead to a reduction in the number of internships offered as a result
The Business Minister said that the current review into modern employment practices will be amended to include a focus on unpaid internships to ensure the matter is properly examined. What is the result of this failure? The failure of this Bill could lead to employers believing that unpaid internships are lawful, but this is not always the case. Interns are legally entitled to receive the minimum wage if they meet the worker definition – none of which is determined by:
  • How the role is advertised
  • The employer’s classification of the role
  • If the employer pays a wage
Instead, a decision will be reached based on the reality of the situation. Classifying the intern as a worker usually depends on:
  • Whether the intern is actually doing work or merely shadowing – if they’re purely watching and learning then they won’t be a worker
  • Whether they have a written or unwritten contract to provide the work personally – if so they will be classed as a worker
Worker rights Once it’s been established that the intern is a worker, they’ll be entitled to the following worker rights:
  • Minimum wage
  • Paid holiday
  • Minimum rest breaks
  • Limited pension rights
When employers are planning to offer unpaid internships they need to ensure that they won’t breach employment laws. A question that employers must consider when weighing up the financial consequences of paying minimum wage rates, is whether or not they can afford the risk of a penalty fine for not paying them. Alongside this, the pool of candidates for an unpaid internship is likely to be smaller rather than for a paid internship, which could lead to the best person for the job being lost because they can’t afford to take the role.      

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