Interns and the National Minimum Wage

Do you have interns working in your organisation? The chances are that you may well have; it is estimated that there are currently about thirty thousand internships in the UK and half of those are unpaid.

What is an internship?

Internships are defined as periods of short-term work usually carried out by young people in the period between finishing study and commencing full-time employment. There is no official definition of the term; nor is there any requirement regarding their duration.

As we discussed earlier this year, there is legal protection and regulation for apprenticeships, but internships have no such protection, except general employment protections.

There have been cases where interns have brought claims to Employment Tribunals and government departments have produced guidance on the ways in which internships should be administered.

The future for unpaid internships

The Government has been examining whether unpaid internships should be banned; they have been criticised for rendering inaccessible to anyone other than people from wealthy backgrounds highly sought-after jobs such as media and fashion. Until legislation is brought in to regulate the internship sector, the current situation remains.

Entitlement to the National Minimum Wage

Whether an intern has an entitlement to the National Minimum Wage depends on their employment status and the application of specific exemptions.

In order for an intern to be classed as a worker, they would need to have a contract to do work or personally provide services and what is known as a degree of mutuality of obligation.

This exists when there is an obligation on the employer to provide work and an obligation on the individual to accept that work. This is a key element of the employer/employee relationship.

In order for a contract of employment to exist, the employer’s obligation will be to pay and the employee’s obligation will be to do the work.

If they meet these criteria, then even if an employer classifies them in a different fashion to avoid the obligation to pay them the National Minimum Wage, their status will still be that of a worker and not paying them the NMW will be illegal.

If there is no commitment or promise on the part of the employer, there is a good chance that the intern will have no entitlement to be paid.

When interns aren’t due the National Minimum Wage

Under certain circumstances, an intern will not have an entitlement to the National Minimum Wage. Those exemptions are as follows:

Student internships

If the intern is a student who is required to do an internship as part of their course, they are not entitled to the National Minimum Wage.

School work experience placements

If the intern is of compulsory school age, they are not entitled to the National Minimum Wage.

Work shadowing

If the intern is not actually carrying out any work and is only observing an employee, they are counted as work shadowing and the employer does not have to pay them the National Minimum Wage.

Voluntary workers

If the intern is a voluntary worker and:

• they are carrying out work for a charity (including a voluntary organisation, associated fund raising body or a statutory body; and

• the only recompense they receive is travel costs, lunch expenses or the like,

then they are not entitled to the National Minimum Wage.

The National Minimum Wage

The current rates for the National Minimum Wage are as follows: