“Exploitative, exclusive and unfair”, that’s how the campaign ‘Intern Aware’ defines unpaid internships.

Exploitative because companies are leveraging the desperation of graduates to get some experience on their CVs in order to benefit from free labour; Exclusive because it rules out anyone who can’t afford to work for free or doesn’t live in London (The Sutton Trust estimates that the cost for a single person living in London, where the majority of internships are based, is £926 per month); Unfair because it’s hard to think of any other situation where you might expect someone to work for free.

National Minimum Wage and the Law
The law is clear that if interns are expected to work a certain number of hours, do set tasks and/ or perform services that add value to the business, they should be paid at least the National Minimum Wage. Many employers do now pay interns for their work: according to The Graduate Market Survey 2015, published by Highflighers.co.uk, two thirds of Britain’s top graduate employers provide paid work experience to undergraduates.

Unpaid internships do, however, remain commonplace. The Sutton Trust, a not for profit think tank, estimates that there are 21,000 people taking on unpaid internships in the UK at any one time, despite the fact that 70% of people in England between the ages of 16-75 in the UK agree that unpaid internships are unfair. Companies try to skirt around the legal issue by implying that work experience is really work shadowing or ‘volunteering’ and its therefore OK not to pay the people doing it. They may also argue that interns are taken on with little or no previous business experience and bring little value initially. Their ‘pay’ is essentially what they gain in experience, and the Company name they can add onto their CV to make them more employable.

The Future
But a warning to all companies offering unpaid internships: the end is nigh. HMRC are focusing their efforts on finding and penalising companies that offer unpaid internships, often retrospectively, and recouping some of that tax they have missed out on along the way. There have been several high profile cases already, involving big industry names such as Harrods, Sony, The X Factor, IPC Media and Arcadia which serve as examples of the David and Goliath type battles being won by interns on the issue of fair pay. Online job boards now refuse to advertise internships unless they are paid. The Intern Aware website names and shames organisations which do not pay interns, sends them letters (and publishes the response) and helps interns to claim back money owed.
The four week limit to unpaid internships, initially proposed by Labour in the lead up to the general election, seems to be gaining traction and will go some way to eliminating lengthy unpaid internships that have been seen in the past. It does not mean that any internships under 4 weeks can be unpaid as the NMW may be applicable from day one of an internship. But it will mean that any internships longer that 4 weeks will have to be paid.

Advice for Businesses offering Internships
Pay: Interns should receive at least the National Minimum Wage for all the hours they are working and records should be kept accordingly.
Recruitment: Internships should be advertised publically and the recruitment process should be fair and transparent. Selection should be based on merit, nothing else.
Documentation: There should be an agreement in place, signed by both parties, to outline expectations, duties, pay, duration of the internship, as well as confidentiality clauses and other policies that may apply.
Induction: Interns should attend any company induction programme, as staff would do. They too need to know where the fire exits are as well as getting to know the values and ethos of the company they are working for.
Development: Remember this is a learning experience and interns should get some direction and input in terms of their development during their internship. Consider setting them a project to do during their internship, aside from day to day duties, which will help to develop them. Meet with them throughout their internship to see how they are progressing, not just at the end when it may be too late to make a valuable contribution.
Assign a buddy: Interns may be relatively young and/or new to the environment they find themselves in. It can be daunting to wander around an office and difficult to know who to ask if you need to find the coffee machine/loo/conference room. Assigning a buddy means that interns will always have someone they can go to with their questions – and limits disruption for others in the office.
Have a heart: Think back to when you were new and knew virtually nothing about the world of work. Accept that mistakes may be made but that this is all part of the learning process (and bear this in mind when assigning work!) Interns do not arrive perfectly ready and able for every task in hand – that’s kind of the point of internships after all.