Do I need to pay my Intern?

In the last two decades, internship and the use of interns has gone from being something which was occasionally offered by big companies on a loose short term basis, to being a normal part of a (usually young) job seeker’s career path.  Their use is particularly prevalent in professional services companies such as law firms and banks where internship is often used as an audition for employment, and in media and creative type companies and advertising agencies who value the fresh new ideas that interns can bring.  Naturally, there has been a ‘trickle down’ in their usage with many smaller companies extending out their traditional 2 week work experience placements to longer internships to the more typical university undergrad, down to year 11+ school students.

With the rise in the acceptance of the intern role, however, has come concern that interns are being used to fill full-time positions, and are occasionally being exploited and used as a source of cheap, if not free, labour.  This is contrary to both the spirit and the point of internship which is to give practical work experience in a particular field to someone who is new the industry.  A structured and well-thought out intern programme can be beneficial to both business and intern.  The intern gains experience and a good reference, and the business gains new ideas and a fresh perspective from a non-typical employee.  Further, the unwillingness to pay interns has led to not entirely unwarranted accusations of discrimination through the back door of those job-seekers who are unable to finance long periods of unpaid labour (typically those from low income families).

But what is the legal status of interns?  Do employers need to pay them?  And what are their rights within the workplace?

An intern will be entitled to be paid if the following applies:

  • They are personally providing a service.
  • They are providing a service to a person who is not their client or customer.
  • They are working under a contract (remember – contracts may be verbal as well as in writing).

Put simply, an intern who is actually performing a job of work and not just shadowing an employee will usually be providing a service.  Further, it is usually straightforward to establish if the intern is providing a service to the business or separately to their own client or customer.

In relation to the third point, for a contract to exist under English law there needs to a quid pro quo element – the exchange of one thing for another.  In standard employment contracts this is usually the exchange of labour for wages.  Without this mutual exchange there is no contract.  Now while this may now sound slightly surreal in that one is only obliged to pay the intern if the intern is receiving wages in the first place, it is not quite that simple.  The exchange element of the contract from a business does not need to be monetary; it could simply be the promise of a job, or a reference, or some work at some point in the future.  So where a business either pays an intern or indicates a promise or some other future commitment to them the intern will be working under contract.  In this case, wages will be payable in accordance with the National Minimum Wage Act 1998.

As ever, the best way to avoid any misunderstandings or disappointments is to have a clear written agreement in place setting out the terms and conditions of the internship.   Please speak to me about this is you have any questions. 

An intern, with or without worker status, will also be entitled to standard health and safety considerations and not to be discriminated against because of gender, colour, disability, or age.  The latter is becoming an increasingly prevalent issue in the workplace are more people start work later and retrain in their 30s and 40s for new careers.  For this reason alone, it can, quite literally, pay a business to have a proper competency based recruitment procedure in place in relation to interns which will evidence non-discriminatory practice.

 

 

 

 

Author: marydonne

Training, Coaching, and HR Specialist.

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