What is the 4 week limit?
The four week limit is a slight tweak to the current law aimed at ending all long term unpaid internships.
Currently, if an intern is doing real work under a contract then they must be paid, according to the National Minimum Wage Act 1998. However, because HMRC haven’t been enforcing the law properly, businesses and interns find the distinction confusing and unpaid internships continue to be found across many industries.
However, some companies try to get around the current law by claiming their interns aren’t working under a contract or claiming that they are on work experience and not doing real work. This makes it difficult for interns to prove in Court or to HMRC (who enforce the minimum wage) that they are entitled to be paid.
The four week limit would cap all unpaid work experience and internships (which aren’t exempted from the National Minimum Wage because they form part of a sandwich year from University or are volunteering at a charity) at four weeks. After this point, the intern would always be entitled to be paid.
What difference will it make in practice?
A four week limit will give greater clarity to employers and give greater security to young people. If the intern is entitled to be paid under the current law, they will continue to be entitled to be paid. However, after 4 weeks of interning or work experience, the intern will always be entitled to be paid.
Does this mean all unpaid internships under 4 weeks will become legal?
No. If an intern is entitled to be paid the National Minimum Wage under the current legislation – they will still be entitled to be paid – even if they have worked for just one day.
Who is supporting the four week limit?
There is very strong support for the proposal. 65% of businesses polled by YouGov this year want to see the law clarified with a four week limit, including support from industry groups like the PRCA, and businesses such as AXA and Pimlico Plumbers. A number of reports recently have made the suggestion, including the Sutton Trust, the Social Mobility and Child Poverty Commission and the London Assembly.
And who isn't supporting it?
There really aren’t a huge number of people objecting to this proposal. We do know a small minority of businesses (12%) and the public (2%) don’t want to see a change, with interns continuing unpaid. Only 19 MPs voted against the policy.
How will it be enforced?
HMRC is the enforcement body for the National Minimum Wage. However, currently very few companies that offer unpaid internships are prosecuted by HMRC. Our hope is that the new law will make things very clear, as there will be no defence available to an employer who has asked an intern to work for free for over four weeks.
Those unpaid internships less than four weeks will still need the current level of investigation by the Government to make sure that they are, but this should be a much smaller pool. We will also continue to lobby the Government and HMRC for better enforcement and protection of interns in their current practices.