The government has announced, “unpaid internships should not exist, and we will work to eradicate this.” This shortly followed the launch of a crackdown. As a result, more than 550 warning letters have been sent to organisations from the government. Enforcement teams have been created to tackle repeat offenders.
It is thought HM Revenue & Customs (HMRC) will target sectors including the performing arts, media, law, and accountancy firms. These companies are recognisable for using unpaid internships. A guidance is also expected to be sent out to employers. This will ensure they are aware of when they should be paying at least the national minimum wage.
According to the Sutton Trust social mobility charity, an estimated 70,000 internships are offered each year in the UK. It is believed that a fifth of 10,000 graduates who become an intern, will not be paid in the first six months. Families with low and middle incomes will struggle financially as an unpaid internship in London will cost more than £1,000 a month, and in Manchester, it costs £827. Interns will be gaining valuable knowledge and skills, however; it comes at a hefty price.
“An employer cannot avoid paying someone the minimum wage simply by calling them an ‘intern’ or saying that they are doing an internship,” the government said, responding to the Taylor review into working practices. Volunteers that are genuine aren’t entitled to payment. However, employers use this volunteer loophole to stop paying for work. This in itself is exploitative. An individual classified as a ‘worker’, is entitled to at least the national minimum wage.
Campaigners want a tighter law surrounding internships. This means that they should be paid, advertised fairly and awarded on merit rather than through contacts. Campaigners also want to bring in harsher penalties to those organisations who break the law. To avoid confusion, campaigners have asked the government to make it clear to staff members and their employer to establish how their roles should be classified.
The government has said they will review the existing policy and legal framework so they can decide what other action should be taken if the crackdown fails to change how employers are currently operating.
Founder and chair of the Sutton Trust, Sir Peter Lampl, stated: “At the end of 2017, there were no prosecutions concerning interns and pay, yet tens of thousands of young people continue to work for free”. This shows the current law isn’t working and changes need to be made.
A campaigner for fair internships, Tanya de Grunwald of Graduate Fog, said: “It is time for HMRC to admit that the reporting system for unpaid internships is not fit for purpose. It relies almost entirely on interns coming forward to complain about their former employers – something few are brave enough to do, for obvious reasons”.
For some, an unpaid internship may be the only path to get into the industry they want to work in when they are older. The positives of undertaking a placement are the valuable work experience and knowledge that you gain. But, working for free can negatively affect an individual’s mental health. And their self-worth. Also, some people aren’t as fortunate to use the ‘bank of Mum and Dad.’ So it’s essential the new changes are put into practice as soon as possible.
If you need any advice or have any questions regarding unpaid internships, please contact a member of the HPC team:
T: 0844 800 5932