The majority of Brits think unpaid internships should be banned

A lack of legal clarity and loopholes in legislation has seen many start-ups and small businesses fail to pay interns - who are legally entitled to remuneration

New research has revealed that the majority of the UK public believe unpaid internships should be banned, as continued confusion over what constitutes a ‘worker’ means businesses are failing to pay staff.

The study by the Social Mobility Commission, which quizzed nearly 5,000 people, has shown that 72% would support a legal ban on unpaid internships and unpaid work experience lasting longer than four weeks – with 42% “strongly supporting” such a cause.

Taking on interns: What you need to know

80% of those surveyed also made it clear they think businesses need to be more transparent in the way they conduct their recruitment practices, believing firms should be required to openly advertise internships and work experience opportunities, rather than managing them informally.

The report comes on the week that Christopher Holmes, Baron Holmes of Richmond, MBE will have his Private Members’ Bill, which proposes a ban on unpaid work experience or internships lasting more four weeks, read for a second time in the House of Lords this Friday.

A lack of legal clarity and loopholes in legislation has seen many start-ups and small businesses fail to pay interns – who are legally entitled to remuneration as they fall under the definition of  a ‘worker’ .

What is the legal definition of a ‘worker’?

This definition is outlined under the National Minimum Wage Act 1998 section 54(3) which says:

“In this Act “worker” (except in the phrases “agency worker” and “home worker” means an individual who has entered into or works under (or, where the employment has ceased, worked under)

(a) A contract of employment; or

(b) Any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;

and any reference to a worker’s contract shall be construed accordingly.”

An independent public body who monitor progress towards improving social mobility, the Social Mobility Commission has repeatedly made calls for a ban of unpaid internships in its successive State of the Nation reports to parliament.

This survey follows a report by the All Party Parliamentary Group on social mobility in January which concluded that all interns should be paid after their first month.

It was argued, that internships without a salary would disproportionately affect poorer graduates or young workers, who could not afford to work for nothing, and thus, would find it harder to claim the career ladder and gain full-time employment without experience.

It’s estimated that there are around 70,000 unpaid internships a year  in the UK, with the majority taken up by graduates looking to get their first ‘job’ after leaving university.

In April, a report from think tank the Institute for Public Policy Research said the number of internships had risen by 50% since 2010.

Hire an intern? What’s in it for me?

Alan Milburn, chair of the Social Mobility Commission, said:

“Unpaid internships are a modern scandal which must end. Internships are the new rung on the career ladder.

“They have become a route to a good professional job but access to them tends to depend on who, not what you know and young people from low-income backgrounds are excluded because they are unpaid.

“They miss out on a great career opportunity and employers miss out from a wider pool of talent.

“Unpaid internships are damaging for social mobility. It is time to consign them to history.”

Lord Holmes of Richmond added:

“Unpaid internships leave young people in a catch-22 situation; unable to get a job because they haven’t got experience and unable to get experience because they can’t afford to work for free.

“The practice is clearly discriminatory, crushes creativity and competitiveness and holds individuals and our country back.

“It’s time we consigned them to the past, to the novels of Dickens.”

Do you think all internships should be paid? Have you hired interns for your own business? Join the debate by tweeting us at @startupstowers