The government has launched a crackdown on unpaid internships, sending more than 550 warning letters to companies and setting up enforcement teams to tackle repeat offenders.
HM Revenue & Customs is expected to target sectors such as media, the performing arts and law and accountancy firms, which have a reputation for using unpaid interns.
It will also issue guidance to employers spelling out when they are legally obliged to pay at least the national minimum wage to interns.
About 70,000 internships are offered each year in the UK, according to the Sutton Trust social mobility charity. It estimates that of 10,000 graduates who are in internships six months after they leave university, a fifth are unpaid. It has calculated the cost of doing an unpaid internship as more than £1,000 a month in London and £827 in Manchester, putting valuable work experience beyond the reach of those from families on low and middle incomes.
Although minimum-wage legislation makes many unpaid internships illegal, the government recently admitted that there had been no prosecutions. Campaigners want the law to be tightened to ensure all internships are paid, fairly advertised and awarded on merit rather than through contacts. They want to make it easier to report unpaid internships to HMRC and to introduce tougher penalties for those found breaking the law.
The business minister, Andrew Griffiths, said: “Employing unpaid interns as workers to avoid paying the national minimum wage is against the law and exploitative. No one should feel like they have to work for free to get the skills and experience they need to get ahead.
“That’s why over the last three months, government enforcement teams have been targeting employers advertising for unpaid interns, reminding them of the law and the consequences of breaking it.”
The government has promised to review the existing policy and legal framework and will consider what other action can be taken if its enforcement crackdown does not force change in the behaviour of companies.
Under employment legislation, anyone who is acting as a “worker,” an official employment classification, must be paid. However, defining a worker relies on multiple factors, which might include an expectation that the person turns up for work each day.
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