Initiative launched to tackle use of illegal unpaid internships

Following the release of the government’s response to the Taylor Review of modern working practices, steps have already been taken to stop the illegal use of unpaid internships.

Internships are used as a way for individuals to gain invaluable insight and know-how into professional roles. The Sutton Trust charity believes around 70,000 internships are carried out in the UK at the same time, with research suggesting over 40 per cent of young people who undertake an internship are doing so without being paid. The charity has calculated the cost of carrying out an unpaid internship as over £1,000 in London, or £827 for those located in Manchester, meaning unpaid internships are likely to be out of reach for those from lower income families as they are unable to absorb the costs.

Under current laws, interns who meet the definition of a ‘worker’ should receive either the national minimum wage (NMW) or national living wage (NLW) based on their age. Internships can, however, be unpaid if the intern is:

  • completing a work experience placement as part of a UK-based further or higher education course
  • carrying out a work experience placement as a student under compulsory school age
  • a true volunteer, usually for a charity
  • carrying out work shadowing. If work shadowing, the organisation needs to ensure the intern is not carrying out any work but is merely observing. Any time spent doing work should be paid for.

It is, however, believed that some organisations exploit the use of unpaid internships to have a source of free labour. In the Good work: a response to the Taylor Review of modern working practices document, the government committed to focusing on the use of unpaid internships. The government has now launched an initiative to stop the unlawful use of unpaid internships. They have sent warning letters to more than 550 organisations who are suspected of wrongly using unpaid internships, including writing to those who have advertised for unpaid interns. Guidance will also be produced for organisations which contains specific information about when interns are legally entitled to receive NMW or NLW.

The government also said they wanted to increase the penalties for those who break the law. HM Revenue and Customs (HMRC) have been tasked with establishing enforcement teams to investigate and take action against offending organisations. It is believed that HMRC will focus their action on the sectors where use of unpaid internships is most common, such as the fashion and design or media sectors. The government has said they will also review whether any other action is needed to prevent organisations using unpaid internships.

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