HMRC cracks down on employers over unpaid interns
The government is cracking down on employers who advertise unpaid intern posts and is issuing new pay guidance for young people. But will it be enough to stop young people working for free?
Internships used to be a feature of competitive industries like fashion or media. But the phenomenon of young people working for free, often in an attempt to get onto the career ladder when jobs are scarce, is now widespread.
The government says that many young people are not aware of their rights, or of the difference between an internship and meaningful work that would qualify for the national minimum wage (NMW).
Now the HMRC is targeting employers by sending letters to 200 companies who have recently advertised unpaid intern opportunities. The government is not naming the companies, but the letters will warn of “targeted checks” to make sure that workers are being paid the NMW – £6.31 per hour for over 21s.
This year alone, HMRC has issued penalties to 466 employers.
We expect to see the government prosecuting offenders and getting money back for interns who have worked for free. Gus Baker
The move comes as the Department for Business, Innovation and Skills (BIS) launches new advice for young people and a video campaign that will be promoted on social media together with 4Talent, in an attempt to raise awareness of young people’s rights.
The government also announced on Monday that two workers involved in London Fashion Week received backdated payment of their wages, after government “enforcement”.
HMRC’s Michelle Wyer said: “Any employer not playing by the national minimum wage rules needs to put things right now. Those that don’t can expect a visit from HMRC – which could result in a penalty, payment of arrears, being publicly named and shamed by BIS or a prosecution.”
What’s the deal with internships? – Poster 1 #internrights @EdinburghNapier @HMRCgovuk pic.twitter.com/nffuNirWKA
— 4Talent (@4Talent) November 11, 2013
Government guidance on internships is improving. Check out our guide cowritten with @ICAEW and BIS #payinterns https://t.co/DirtAZGMJb
— Intern Aware (@internaware) November 11, 2013
Legalities
The move follows a significant win by former intern Chris Jarvis, 25, who was paid £4,600 by electronics giant Sony in a legal settlement after he researched his rights and put it to the company that he was entitled to the minimum wage.
Anyone classed as a “worker” by law is entitled to the national minimum wage. This is defined in several ways, including: having set work hours, the length of the term of employment or the extent that you are “under the control” of the company.
Employment Relations Minister Jo Swinson said: “Not paying the national minimum wage is illegal and if an employer breaks the law, government will take tough action… Anyone considered a worker under the law should be paid at least the minimum wage, whether they are an intern, or someone on work experience.”
Gus Baker, founder of campaign group Intern Aware, said he was “delighted” that the government was investigating companies who appear to be in breach of national minimum wage legislation.
But added that the measures needed to be backed up by the threat of prosecution.
“Young people will rightly be sceptical about this new initiative until they see results,” he said. “With so many employers potentially breaking the law, we expect to see the government prosecuting offenders and getting money back for interns who have worked for free.”
Young people concerned that they are being exploited can contact the HMRC’s Pay and Work Rights Helpline on 0800 917 2368