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6 reasons you must pay interns

Edward Prichard

July 2018

The majority of interns are entitled to receive the National Minimum Wage (NMW), but a lack of clarity over what defines an intern has led some employers to taking advantage of their recruits

As previously discussed in Benefits of hiring graduate interns, graduates are increasingly turning to internships to gain the work-based experience they may not have acquired at university, whilst employers are using them to fast track youthful talent into their companies.

However, as with most new employment practices there are some out there who have exploited the lack of legal clarity around the issue. An article comparing the merits of paid and unpaid internships is far from unique. Thanks to the establishment of pressure groups such as Intern Aware and the Global Intern Coalition, and acts of protest such as the #GlobalInternStrike1 and the documentary An Unpaid Act2, internship pay has frequently appeared in the headlines over the past decade.

Despite this, there still seems to be a large amount of misinformation out there. In this article I will argue that is not only a legal obligation to pay interns, but a moral duty.

The legalities

The National Minimum Wage Act 1998 does not refer to interns specifically, but rather mentions 'workers' as a catch-all term3. The act defines a worker as an individual who works for another under a contract of employment, which can be expressed or implied either orally or in writing4. This is expanded and clarified on gov.uk, where those who are eligible for NMW include 'casual labourers', 'apprentices' and, excitingly, 'seafarers'. Those who aren't include 'self-employed people running their own businesses', 'volunteers' and 'prisoners'5.

It is this lack of clarity that is exploited by unscrupulous employers, who argue that interns are not normal workers, that they are 'shadowing' or 'volunteering', or even that there is a separate rule for interns, and payment through experience and expenses is enough to compensate this.

Handily, there is a section of the act dedicated to work experience and internships, which lists the following cases as those in which an intern would not be entitled to the NMW:

  • a student doing work experience as part of a higher or further education course
  • a student of compulsory school age
  • a volunteer, or individual completing voluntary work
  • a participant of a government or European programme
  • work shadowing6.

This means that the vast majority of internships, especially those completed after graduation, do not fit these criteria and therefore must pay at least the NMW.

Arguments for and against

In the nearly ten years since its launch, Graduate Talent Pool (GTP) has heard many arguments for why employers shouldn't have to pay their interns, despite this being illegal. Here are the answers to some of those arguments.

'Interns are receiving good experience in this role'

The act of simply working in any capacity will gain an individual experience - as are you, as a recruiter. Are you saying you also don't deserve to be paid for working?

'I did an unpaid internship, and I was fine'

That may be so, but only a particular demographic is able to afford completing an unpaid internship. A study by the Sutton Trust recently calculated that it costs over a £1,000 a month to take an unpaid internship in London.7 It is those with non-traditional families, working class parents or guardians, disabilities and/or people of colour who are excluded from these roles.

Just because the previous generation made mistakes does not mean this one has to follow suit.

'It's the way of the sector, everyone else does it'

If everyone else pays their interns nothing, imagine the candidates you could be interviewing if you paid the NMW.

Consider also the wider damage this attitude could have on your sector. Journalism8 and the fashion industry both struggle to attract people of colour and working-class candidates. These are also two of the industries with the worst reputation for not paying their interns. Having such a reputation leads to the sector becoming stilted and lacking in originality, as the same kinds of people with the same kinds of ideas are hired again and again.

You have a responsibility, as part of a sector, to help challenge its unethical practices.

'We can’t afford to pay them'

This is my personal favourite. The answer is simple - if you can't afford interns, don't hire them.

If you can't afford to expand your business, whether that's through staff training, increased floor space or improved infrastructure, then you don't expand your business. The same applies to interns.

'There aren't any jobs for graduates anyway, they might as well gain experience with us'

Following the last recession9 more than 2.1 million professional jobs, and just fewer than 75,000 non-professional jobs, have been created in the UK labour market, and graduate unemployment has declined to a healthy 5.3% - a level not seen since 1989.10 It seems that there are plenty of graduate jobs out there - perhaps too many, according to Labour market myths: 'There aren't enough jobs for graduates' - and with the number of people applying for university decreasing11 employers must make themselves more attractive to a shrinking pool of talent. Not paying interns simply won't cut it in the years to come.

'It's too much of a risk to hire a graduate without experience'

The big companies don’t seem to think so. Nearly every large graduate employer in the UK has some sort of graduate internship scheme in which people with little to no work experience are hired. If you consistently fail to hire suitable graduates, the issue may be with your hiring practices, not the candidates.

Graduate Talent Pool (GTP) was set up by the government in 2009 in response to an anticipated rise of graduate unemployment in the wake of the recession, and Prospects has run the service since its inception. Its brief was not only to provide a graduate internship jobs board, but to also promote the benefits of internships to employers, careers services and graduates.

With the assistance of Intern Aware, GTP's role has been expanded to include campaigning against unpaid internships, banning them from the site and setting an example that others have followed. GTP's policy is that the minimum an intern pay should legally be paid is the National Minimum Wage (NMW).

The National Minimum Wage works out at just over £13,430 per annum for 21-25 year olds, and the National Living Wage at £14,250 for 25+ year olds (based on a 35-hour working week).

Notes

  1. The Global Intern Strike took place 20 February 2017 and the action can be followed via the hashtag #GlobalInternStrike
  2. See the trailer for the documentary An Unpaid Act, and any updates can be found on their Facebook page.
  3. National Minimum Wage Act 1998, S 1 (2) (a).
  4. National Minimum Wage Act 1998, S 54.
  5. Gov.uk. Who gets the minimum wage? 7th June 2018.
  6. Ibid.
  7. Montacute, R. 2018. Unpaid, Unadvertised, Unfair. https://www.suttontrust.com/research-paper/internships-unpaid-unadvertised-unfair/. 7th June 2018.
  8. Illgner, A. 2018. The Domino Effect. 7th June 2018.
  9. Grove, M. 2018. Effects of the recession on the graduate labour market. 7th June 2018.
  10. HECSU, What do graduates do? 2017.
  11. Weale, S. 2018. University applications fall despite surge in foreign students. 7th June 2018.

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Photo: Edward Prichard
Edward Prichard
HE services executive
Prospects

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