• International Workplace
  • 21 February 2018

Government cracks down on unpaid internships

The government has launched a crackdown on unpaid internships, sending more than 550 warning letters to companies, and setting up enforcement teams to tackle repeat offenders.

The most recent government estimate is that there are 70,000 interns in the UK at any one time, and that over 40% of young people who have carried out an internship have done so unpaid.

HM Revenue & Customs is expected to target sectors such as media, the performing arts and law and accountancy firms, which have a reputation for using unpaid interns.

It will also issue guidance to employers, spelling out when they are legally obliged to pay at least the national minimum wage to interns.

According to the Sutton Trust, minimum wage legislation makes many unpaid internships illegal, but the law is not properly enforced. In fact, the government recently confirmed that there have been zero recorded prosecutions in relation to interns and the National Minimum Wage. The Trust is backing a bill by Conservative peer, Lord Holmes of Richmond, tightening minimum wage legislation to ban unpaid internships over four weeks in length, a move that has also been supported by the All-Party Parliamentary Group on Social Mobility and the government’s Social Mobility Commission. The Trust would like to see all internships longer than one month to be paid at least the National Minimum Wage of £7.50p/h and ideally the Living Wage of £8.56 (£10.20 in London).

The Trust is also recommending that internships should be advertised publicly and that recruitment processes should be fair, transparent and based on merit.

There are concerns that some employers are either unaware that their interns should be paid, or that some employers are exploiting the lack of clarity in the law to avoid paying their interns.

The government has promised to review the existing policy and legal framework and will consider what other action can be taken if its enforcement crackdown does not force change in the behaviour of companies.

Sir Peter Lampl, Founder and Chairman of the Sutton Trust and Chairman of the Education Endowment Foundation, said:

“Around 40% of young people who have carried out an internship have done so unpaid. All internships over four weeks should be paid at least the minimum wage of £7.50 per hour. Failure to do so prevents young people from low and moderate-income backgrounds from accessing jobs in some of the most desirable sectors such as journalism, fashion, the arts and politics.

“All internship positions should be advertised publicly. Large numbers of internships are never advertised and instead offered through informal networks.  This practice locks out young people without connections. Also, the process by which potential candidates are selected for internships should uphold the same standards of recruitment as for other jobs.”

The full findings and recommendations of the Sutton Trust are available to view in its report ‘Unpaid, unadvertised, unfair’.