HMRC is set to investigate 100 companies after a campaign group told the government they could be breaking the law over internships.
Intern Aware, a group that campaigns against firms whose internship schemes are, it says, breaking minimum wage legislation, handed the list of companies to junior employment minister Jo Swinson. The names of the firms have not yet been revealed.
The move marks the latest episode in the long-running internship saga. Interns have occupied a regular place in the headlines over the last two years, following renewed calls for a clamp-down on firms that fail to pay the minimum wage.
Intern Aware's Ben Lyons said the group was established to pressure for the law to be enforced and to fight what it considers the unfairness of unpaid internships. "We set it up at university because we were angry at seeing friends of ours, who were bright and hardworking, being priced out of professions because they couldn't afford to work for free," he told The Guardian. "It's not just that they're wrong, but lots of these companies are breaking the law."
Many businesses rely on interns for day-to-day work. But, as calls for the proper enforcement of the law grow, thousands of firms across the country may be forced to dramatically change their practices.
What does the law say?
All workers are legally entitled to be paid at least the national minimum wage. The rate at which they must be paid depends on their age. Last week it was announced that the minimum wage is set to rise, to £6.31 for adults and £5.03 for those aged 18 to 20.
Most interns would legally be considered workers. There is a number of criteria that are used to determine whether or not an individual is a worker. Does the individual have set working hours? Do they have set responsibilities? If so, they are almost certainly a worker.
Many companies are not aware that their interns are, in fact, entitled to rights including the minimum wage, rest breaks, paid holiday, sick pay, and more. If your intern works at specified times and has set tasks, they are almost certainly entitled to these.
There are significant potential repercussions for firms that break minimum wage legislation. If you are found to be underpaying or not paying at all, you could receive a fine of up to £5,000 and be forced to make back payments.
It is also vital to understand that it doesn't matter whether or not your interns have 'agreed' to work for nothing. Regardless of your arrangement with them, if they are classed as workers you are legally obliged to pay them at least the minimum wage.
Are there any exceptions?
Very few. It is still possible to take on work experience, as these individuals are there in an observational role. They are shadowing, and do not perform the work themselves. If they are carrying out work that another individual would otherwise have to do, and if they are there for more than a couple of weeks, they are almost certainly classed as a worker.
If you are in any doubt about the minimum wage you should seek independent professional advice, or contact HMRC.