Recent headlines indicate a continuing government agenda to clamp down on the exploitation of labour, particularly young and low paid workers.
There is growing concern about the use of free labour (variously labelled internships, work experience or volunteering) as a means of exploiting workers and evading National Minimum Wage (NMW) legislation. Government guidance stresses that whether someone is entitled to the NMW is not dependant on the title you give them, and the title ‘intern’ has no legal status under NMW law.
Demand for work experience amongst the student population is buoyant. That is not surprising; there is good evidence that it improves employment prospects upon leaving full time education. However, if there is an obligation for the ‘intern’ to report to the work place at certain times, and perform a service for the organisation, the intern could well be a ‘worker’, and entitled to receive the NMW, not merely expenses as is so often the case.
The government recently promised to fast track all intern-related complaints to the Pay and Rights Helpline. HMRC claim to have clawed back in one recent 12 month period over £192,000 in unpaid wages, for 167 complainants who identified themselves as interns, volunteers or work experience workers. Employers can also find themselves defending an unlawful deduction from wages claim in the Employment Tribunals.
Some internships may be genuine educational opportunities, and there are statutory exceptions under NMW law, but careful consideration, advice and properly documented arrangements are essential to protect your business.
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