Report challenges legality of unpaid internships

A report calling for fair wages for young graduate interns received widespread media attention when it was published in July 2010. It argued that employers, generally in the media, fashion and politics, providing internships for no pay, or below the national minimum wage, were acting unlawfully. The government said that it would give careful consideration to the report. Trade unions are also campaigning in a variety of ways to improve interns’ working conditions.

Key points

On 31 July 2010, the Institute for Public Policy Research (IPPR), an influential think-tank, and Internocracy, a campaign group representing interns, published the report. It called for recent university graduates and other young people undertaking internships to be paid a ‘fair wage’. The report argued that employers offering unpaid internships, or paying interns less than the national minimum wage (NMW) were breaking the law.

The report cited a survey (545Kb PDF) by the Chartered Institute of Personnel and Development (CIPD) suggesting that more than 20% of employers planned to hire interns during the summer of 2010, up from 13% the previous summer, and potentially amounting to a quarter of a million placements. A separate CIPD learning and talent development survey found that around half of those employers taking on interns paid them at least the adult NMW. However, under one third (28%) paid less than this level and under one fifth (18%) did not pay a wage, although most provided travel expenses. Unpaid internships are particularly prevalent in sectors such as fashion, the media and politics.

The report acknowledges that unpaid interns gain valuable experience, make important contacts and often secure a permanent job in their chosen sector. The authors’ primary concern is that unpaid internships are exclusive and unfair. They say that people such as those from low-income families, or those whose parents are not prepared to support them financially, are excluded from these career-changing opportunities.

According to the report, private sector organisations are normally under a legal obligation to treat interns as workers and to pay them the NMW. In November 2009, in the case of Nicola Vetta and London Dream Motion Pictures involving the Broadcasting, Entertainment, Cinematograph and Theatre Union (BECTU), an employment tribunal ruled that someone who had initially agreed to work for expenses only was still entitled to the NMW. The Low Pay Commission (LPC) has expressed concern about the growing number of people who are excluded from the minimum wage. In addition, interns employed by charities and statutory bodies may count as voluntary workers and therefore may be exempt from the NMW.

The report called on the government to phase out unpaid internships in all publicly funded organisations and to work with the LPC and employer bodies to ensure that private sector employers understand their legal obligations. It also urged trade unions to pursue more tribunal cases concerning unpaid internships.

Reaction to the report

David Willetts, Minister for Universities and Science at the Department for Business, Innovation and Skills (BIS), said that the government would consider the IPPR report carefully. He added:

Young people have been the biggest victims of the recession. We are committed to helping them get into work and realise their ambitions. Internships can contribute to this, but the exploitation of interns is unacceptable and employment legislation must not be breached.

He said that, of the 22,000 internships advertised on the government’s Graduate Talent Pool website, two thirds had been paid.

The ‘rights for interns’ website operated by the Trades Union Congress (TUC) welcomed the report, as did the National Union of Students (NUS). NUS Vice-President Susan Nash commented:

The experience gained by interns is often invaluable … but by not paying them employers are restricting these opportunities to the wealthy few. Interns are a vital part of many industries and employers should recognise this by paying them a decent wage.

Trade union campaigns

According to the TUC, ‘at least a third of all internships are unpaid, flouting [NMW] regulations … and barring access to all those who can’t sustain themselves while working unpaid’ (General Council Report, 2010, p. 19). Its ‘rights for interns’ website, established in response to the growth of unpaid internships, is an online service giving advice on interns’ legal rights, including the right to be paid and to join a trade union. In partnership with internship campaign groups, the TUC has pressed for improved guidance on the application of the NMW to interns along with stronger enforcement. Unions in journalism and broadcasting sectors have been particularly active on this issue. A resolution debated at the TUC’s annual conference in September 2010 reiterated the call for unions to ensure that interns are paid the NMW.

Mark Hall, IRRU, University of Warwick

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