Unpaid Internships Are Illegal

Internships are becoming essential for access to many professions. Because a high number are unpaid and unaffordable to those from ordinary backgrounds, too many young people are being excluded from the opportunities that they deserve.

Working for free doesn’t come cheap. Unpaid internships are overwhelmingly based in London, where the cost of living is amongst the highest in the UK. The Evening Standard recently found that the average rent in the city was poised to break the £1000 per month barrier. Internships vary in length, but almost all last three months or longer. Three months working for free could cost an intern over £3000. That’s money that most simply don’t have.

This means that too many young people are locked out of the opportunities they deserve by unpaid internships. While those who can afford to live for free are able to gain experience and get a foot on the career ladder- the vast majority are left behind. It is simply unfair. Young people who have played by the rules, worked hard at school and taken on thousands of pounds of debt to get a degree are finding themselves cast aside in a career market that values experience over qualifications.

But unpaid internships aren’t just wrong; in most cases they are illegal. Under employment law, people who work set hours, do set tasks and contribute value to an organisation are “workers” and are entitled to the minimum wage. This means even if your internship was just about being expected to turn up at a certain time and add some numbers in Excel you are likely to be entitled to pay. And as it is impossible to sign away your rights, even if you have agreed to work without pay you can still claim. Every time an intern has taken their employer to court for not being paid the minimum wage they have won.

Unpaid Internships are Bad for Young People

As youth unemployment races past the 1 million mark, young people are facing an increasingly difficult task getting a first foot on the career ladder. With competition for jobs growing, barriers to the labour market are increasing, with jobseekers expected to have months, even years, of professional experience under their belts before they can even think about applying for entry-level positions.

“Employers know they can get away without paying interns a thing because graduates ‘need’ the experience, and as a result employers expect someone starting an entry level job to know everything on their first day. In the past graduates were employed for their potential, and their ability to learn quickly, not proof on their CV that they can hit the ground running.”
Sarah, 21, Intern Aware 2012 Survey

The high demand for work experience, coupled with tightening budgets and a shortage of graduate jobs, has created a dangerous race to rock bottom. Young people leaving full time education are expected in many sectors to work for free, often indefinitely. There is a growing consensus that this is illegal, whilst powerful evidence suggests that it damages social mobility as those from low-income backgrounds are excluded from the opportunities they deserve.

Statistics from a survey on internship quality conducted by the European Youth Forum paint a depressing picture. Just over half of all interns surveyed (51%) had been paid at all, and 41% of those who were compensated found that the remuneration level was insufficient to cover their day-to-day expenses. In total then only 25% of the interns surveyed were able to make ends meet with the compensation they were entitled to, with the vast majority (65%) relying on financial assistance from the bank of mum and dad.

That 3 out of every 4 interns are insufficiently compensated for the work they do suggests that non-payment of interns is a systemic problem rather than just a small number of rogue employers trying to cut costs. More worrying still is that the same number (75%) of internships are underwritten by an official written contract of employment, confirming that unpaid internships have become an accepted practice across all sectors and, hitherto, have come under little to no legal pressure whatsoever.

These statistics matter. Not only are unpaid internships damaging for young people, but they are also damaging for society, creating closed circles of privilege in the professions and hurting social mobility, and for businesses, limiting the pool of skills and talent from which they recruit. That is why Intern Aware is calling for fair access to the internship market by ensuring that all interns are paid, at least, the national minimum wage.

Unpaid Internships are Bad for Business

In 2011 over a third of graduate jobs went go to those who have already done an internship with the company in question. Recruiting innovative, intelligent and creative new employees is essential for modern businesses. Those young people who might be most suited to specific careers in may not be the same ones who are able to afford to work for free. If bright, talented and able graduates are stuck working in bars rather than at the top of their chosen fields, it is a waste for all concerned.

Paid internships allow all to compete on an even footing for valuable experience.

Paid internships allow all to compete on an even footing for valuable experience. Across all sectors, those firms that offer paid experience get more applications from a broader range of candidates. By offering the minimum wage, or even the London living wage, firms are able to secure the most able workers.

Where internships are informal and unpaid they are likely to be unstructured and unhelpful for the intern and the company. Where companies choose to pay interns they are more likely to invest time and effort in ensuring the internship program is structured and useful for all concerned.

Employers who show their interns the respect of paying them for their work can expect to get respect back in return. Paying your staff isn’t an optional luxury, its central to a sustainable business model. If interns are doing real work they deserve to be paid for it.

Unpaid Internships are Bad for Society

Unpaid internships are essential, expensive and exclusive. Internships have become a pre-requisite for graduates looking to access the professions. Alan Milburn reported in March 2012 that over 30% of newly hired graduates had previously interned for their employer, rising to 50% in some sectors. The Wilson Review of Business-University collaboration found that “lack of work experience appears as a key barrier to young people, including graduates, in securing employment”.

84% of people over 35 said that a young person in their family could not afford to do an unpaid internship in London.

The impact of unpaid internships on social mobility and regional equality is extremely significant. Working for free doesn’t come cheap. Internships are overwhelmingly based in London, where the cost of living is amongst the highest in the UK. The London School of Economics estimates that a month living in London will typically cost a young person £1,000. Internships vary in length, but almost all last three months or longer. According to these figures a three-month unpaid internship could cost an intern over £3000. That’s money that most young people simply don’t have.  In a poll conducted by Survation for Unions 21, 84% of people over 35 said that a young person in their family could not afford to do an unpaid internship in London.