Originally published 27 August 2010
Keywords: interns, right to be paid,
As the Summer vacation period draws to a close, a number of students will be knocking on the door of employers, looking for an internship: a chance to gain experience of working life before undertaking further study or committing to a full-time career. While internships can offer invaluable benefits to both employers and interns alike, an issue that is sometimes overlooked is whether or not the intern has a right to be paid. In this Update, we answer some of the key questions employers might have when contemplating whether to engage an intern.
COMMON ISSUES SURROUNDING THE USE OF INTERNS
Q: |
What is an 'intern'? |
A: |
An 'intern' is someone who undertakes work experience in the form of an internship or placement in order to gain experience, make contacts and help them to secure a permanent job in their chosen career sector. This can range from school age children through to students who undertake training as part of a degree course. Other terms are used to describe similar arrangements, e.g. vacation placements and work experience schemes. |
Q: |
Do interns have a right to be paid? |
A: |
Subject to certain exceptions, interns must be paid if they satisfy the legal test for being a 'worker'. |
Q: |
How do I know whether my intern is a 'worker'? |
A: |
Workers are individuals engaged under a contract (which does not
have to be in writing) to perform work personally. So, a key
requirement is for the individual to perform the work himself and
not to be able to delegate it to someone else. Excluded from the
worker definition would be an individual who is in business on his
own account. |
Q: |
I think our intern would be classified as a 'worker'. What do we need to pay him? |
A: |
At least the National Minimum Wage (NMW). For workers aged 22 or
over, this is currently £5.80 an hour. For workers aged
18-21, £4.83 an hour. For young workers under 18 years old
but above compulsory school age (who are not apprentices) the rate
is £3.57 an hour. |
Q: |
I think our intern would be classified as a 'worker' but they are happy to work for free. What are the potential risks? |
A: |
If the intern is caught by the NMW and the employer does not pay
it to them, the employer may be committing a criminal offence and
face the risk of fines. Many NMW cases are brought by H.M. Revenue
& Customs. The individual can also make a claim for the pay he
should have received. |
Q: |
What are the exceptions? |
A: |
There are three main exceptions to the obligation to pay NMW in the context of an internship. These are:
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