The law on unpaid internships

Jasmine Patel, an employment lawyer at Leigh Day, explains why unpaid internships are often in breach of the National Minimum Wage:

The settlement by electronics giant Sony to Chris Jarvis, a 25 year old ex-intern who was represented in his legal challenge by Leigh Day and supported by Intern Aware, has led to a great deal of debate on the legal status of unpaid internships as well as their moral legitimacy in an economic climate of rising youth unemployment and increased costs of living.

Jasmine-Photo-150x150.jpgInternships are very much a rite of passage for a lot of young graduates. Amongst my own contemporaries, there was an understanding that after we finished university, we would almost certainly need to work unpaid at the companies of our choice, if we were lucky, for at least a little while to get our foot in the door.

There is no doubt that some of us found our internships to be a fun and exciting way to learn more about an organisation, but for many of us, not getting paid caused us real issues.

It seemed very unfair to those of us whose internships lasted more than a week or two, and involved contributing to the success of an organisation, not to receive acknowledgment or pay for that contribution.

Unfortunately this was Chris’ experience whilst working for Sony. Far from simply work shadowing other people and learning more about Sony, Chris Jarvis was provided with a specific task to perform, one which if he had not been doing would have been allocated to a paid member of Sony’s staff.

He felt under-valued and exploited by the company and decided to take matters into his own hands, bringing a claim against Sony for unauthorised deduction of wages.

Because Chris ended up settling with Sony for approximately £4,600, which was roughly the amount he would have been paid at the minimum wage level, we will never know for certain if a tribunal would have found that he was entitled to the national minimum wage.

Nevertheless for us as his lawyers all the signs were there that he had a strong case, which we believed, he would win.

To be entitled to the national minimum wage you must be a ‘worker’. This means someone who works under a contract of employment or any other contract where they do work personally for someone else (unless that other party is their client or customer).

Some more ways in which to establish if you are a ‘worker’ include:

  • Whether there is an obligation on you to accept work or services from the company and an obligation on the company to provide that work, i.e. a mutuality of obligation between both parties
  • The extent to which you are required to undertake work personally
  • Whether you are rewarded for your work
  • The extent to which you are “under the control” of the organisation.
  • The length of the internship. Internships of say 1-2 weeks do not generally enable an intern to undertake any significant work for a company and therefore it is less likely they will be a worker, however if an internship is for a longer period it is likely that the work the intern does will be of increasing value to the company and there is more chance of them being a worker

In Chris’ case he was required to attend work at set times and undertake set tasks and the work he was doing added significant value to Sony. So much so that he was told he could not complete an art test that would have enabled him to obtain paid work at Sony, during working hours and was asked to do the test during his weekends because of his heavy workload. Chris clearly therefore had good arguments to show that he was a worker.

Intern Aware are also working hard to raise awareness around this issue to encourage other interns to stand up to their employers if they believe they should be being paid. Hopefully Chris’ case and those like it will also encourage employers to put an end to unpaid internships thereby enabling those who would not be able to work for free to apply.

The problem of unpaid internships is not going to go away any time soon. A poll conducted by Survation for Unions 21 and Intern Aware in March 2013 suggests that almost four in five (78 per cent) 18-34 year olds could not afford to live in London away from home to become an unpaid intern.

Given that a lot of the top companies are based in London this means there may be a significant proportion of young people missing out on the chance to get such experience. Unpaid internships end up becoming an exclusive opportunity for the well off and arguably reinforce our already unequal society.

It’s not just the interns who lose out however as employers are no doubt also depriving themselves of some amazing untapped talent. Isn’t it better to pay interns and be able to benefit from the contributions of people with a variety of different backgrounds, rather than to not pay those select few who can afford it?