Best Practice for Business

Internships are an increasingly common entry-level path into a wide range of industries. Here, we would like to offer you what we deem as a minimum standard that businesses should legally and morally hold themselves to when taking on interns.

What is an internship and why should they be paid?

There is no legal definition of an ‘intern’ in the UK. The label given by an employer to an ‘intern’ is irrelevant because it’s what happens in the workplace that determines their employment status.

Internships are sometimes called work placements or work experience. These terms have no legal status on their own. The rights interns have depend on their employment status and whether they’re classed as:

  • a worker
  • a volunteer
  • an employee

If you’re unsure about an intern’s employment status the Government provides detailed guidance on the classifications as well as information on rights and pay for interns.

https://www.gov.uk/employment-rights-for-interns

If an intern is classed as an employee or a worker then they must be paid at least the National Minimum Wage.[1]

What should not be considered as an ‘internship’?[2]

Student placements

Students who are required to undertake an internship for less than 1 year as part of a UK-based further or higher education course aren’t entitled to the National Minimum Wage.

School work experience placements

Work experience students of compulsory school age, i.e. under 16, aren’t entitled to the minimum wage.

Voluntary workers

Workers aren’t entitled to the minimum wage if both of the following apply: they’re working for a charity, voluntary organisation, associated fund raising body or a statutory body they don’t get paid, except for limited benefits (e.g. reasonable travel or lunch expenses). However, we still recommend that anyone undertaking ‘real work’ is paid, to ensure that these opportunities are accessible to all and still attracting the best young talent to them.

Work shadowing

The employer doesn’t have to pay the minimum wage if an internship only involves shadowing an employee, i.e. no work is carried out by the intern and they are only observing.

Why paying interns makes sense for your business

1.     You can pick from the very best talent to join your organisation, not just those that can afford to work for free

It is clear that you want the very best people to come and work for you, whilst giving a fantastic opportunity to young people. However by not paying your interns, you are limiting the pool of talent that you can choose from. It is then no longer about who has the best qualifications or attitude, but it becomes about who can afford to work for free.

Living in London costs upwards of £1,000 a month for young people[3], and with the increasing financial pressures of university not far behind them, this is very difficult for most graduates.

2.     You rely on innovation, creativity and new ideas

You will know that your organisation cannot afford to stand still, it must be competitive and constantly innovate. This is another reason why paying interns is so important. Young people bring creativity and new ideas with them that can help you immensely. If you limit who can intern with you, then you will put up a barrier to some different and diverse ways of thinking and innovating.

As an arts-based employer, you will know how important creativity is. It is the heartbeat of what you do and it should be encouraged. So by paying interns, you make sure you pick someone based on what they can add, not what they can pay.

3.     If you want to help diversity and opportunity, make sure they are accessible to all

The majority of internships are based in London[4], and this creates a problem for bright, talented individuals from further afield. Unpaid and expenses only internships tend to favour those from London who may already have accommodation and support from their parents. This leaves people from elsewhere with little hope of breaking into the industry.

We know that your internship programme is most probably well-intentioned and designed to help to offer young people an opportunity to get into the industry. But unpaid internships often exclude those that really need to help the most.

Fair Internship Principles

These are the five basic principles behind a fair internship. We believe:           

1.     Internships  are  a  short  period  of  work  and training  that  help  young  people  by giving  them invaluable workplace experience. They also allow employers to assess the potential of employees to see if they would be suited to their workplace.
2.     Internships should be advertised openly and recruited on merit.
3.     Interns should always be paid at least the national minimum wage to ensure young people are judged on their talent – not their ability to work for free.
4.     It is important that internships are high quality, and structured to ensure both parties benefit from the relationship.
5.     That more should be done more to promote and support fair internships and end exploitation.

How To: Building a High-Quality Internship

Preparation and planning

Interns can add real value to your business and if planned properly can be of huge benefit to you and the successful applicant.

Here are some helpful hints to help you plan a successful and high-quality internship:

  • Think about the tasks that an intern-level candidate can do and create a job description for the role.
  • Think about how long the internship should last.
  • Think about how you can support you intern through their time in your business and assign them a supervisor or line manager who can review their progress.

Advertising internships

Internships should be advertised openly and transparently. Advertise the job role and all of the documents openly in a range of relevant places. Most universities have a graduate careers service or job board that is free to post internship adverts, usually online.

How much interns should be paid

We advocate that interns should be paid at least the National Minimum Wage, and preferably the Living Wage.

The Living Wage Rate varies across the country. To find out more about Living Wage rates in your area visit http://www.livingwage.org.uk.[5]

YEAR

LIVING WAGE

21 AND OVER

18 TO 20

UNDER 18

APPRENTICE

Rate effective from 1st October 2014 (p/h)

£7.65 (£9.15 in London)

£6.50

£5.13

£3.79

£2.73

 

 

These pay scales are reviewed annually and can be found at www.direct.gov.uk.

What if you don’t follow the National Minimum Wage legislation?

If an intern is considered to be a ‘worker’ but has not been paid the National Minimum Wage they can make a complaint against you and make a claim for unpaid wages. If found guilty you could have to pay your interns in arrears, you may also be required to pay backdated tax, national insurance contributions and you face a financial penalty of up to £20,000 for each intern.[6]

To make sure you are adhering to employment law on work rights and pay call the Pay and Work Rights Helpline on 0800 917 2368.

Contracts

We believe that interns should be provided with a written contract of employment as they let employers and young people know exactly the expectations and commitments they are making. As a minimum, the contract should specify an intern’s job title, working hours, rate of pay and duration of internship, holiday entitlement and notice period.[7]

The end of the internship

What if I can’t hire them?

You will have reviewed progress with your intern during their time with you. Have another, more formal meeting toward the end of the internship to gauge:

  • Their aspirations – do they want to work in my industry?
  • Their experience – be open to constructive feedback of the internship and ways that you can improve.
  • Next steps.

What you can do

  • Use your contacts in other companies to help your interns find another position (either internship or permanent).
  • Help them identify the type of company that might help them gain more skills and experience.
  • Provide them with a reference.
  • Give interview techniques and practice.
  • Keep in touch!
  • Offer to meet up to see how things are progressing with them.

Further advice and help

HMRC: http://www.hmrc.gov.uk/

Intern Aware: http://www.internaware.org/

Pay and Work Rights Helpline: 0800 917 2368

 



[1] https://www.gov.uk/employment-rights-for-interns

[2] http://www.legislation.gov.uk/uksi/1999/584/regulation/12/made

[3] http://www.suttontrust.com/wp-content/uploads/2014/11/Unpaid-Internships.pdf

[4] http://webarchive.nationalarchives.gov.uk/+/http:/www.cabinetoffice.gov.uk/media/227102/fair-access.pdf and http://www.prca.org.uk/%5COver7pcofPRInternshipsareunpaidrevealsjointPRCAInternAwarestudy

[5] http://www.livingwage.org.uk/

[6] https://www.gov.uk/government/news/national-minimum-wage-penalties-increased-on-rogue-employers

[7] https://www.citizensadvice.org.uk/work/rights-at-work/basic-rights-at-work/