Should your interns be earning the national minimum wage? Louise Fernandes-Owen summarises recent guidance from both the government and the Gateways to the Professions Collaborative Forum.
Internships are on the rise. Whether this is in response to the Big Society or the economic climate, interns are an increasingly common feature of the workplace. Earlier this year, the Gateways to the Professions Collaborative Forum published the Best Practice Code for High-Quality Internships (the Code). The Government has now also published updated guidance on the National Minimum Wage (NMW), clarifying when interns should receive the NMW.
There is no specific legal definition of ‘intern’ and interns may in fact be ‘employees’ or ‘workers’, attracting greater employment rights than first anticipated. ‘Employees’ are individuals who have entered into or work under a contract of employment. This involves personal service and mutuality of obligation. Employees have various rights, including the right to claim unfair dismissal.
The wider definition of ‘worker’ includes employees and also individuals who have entered into or work under any other contract whereby they undertake to do or perform work or services personally. Workers are entitled to the NMW.
The Code includes guidance for employers on preparing for internships; providing fair and equal access to internships; offering work that will develop interns’ skills and implementing supervision/mentoring throughout the process. The Code contains six best practice principles: preparation; recruitment; induction; treatment; supervision/mentoring; and certification, reference and feedback.
The Government’s guidance includes advice on whether interns should receive the NMW. The guidance confirms that “intern” has no legal status under NMW legislation and entitlement to the NMW does not depend on job titles, the type of work undertaken, how the work is described (e.g. “unpaid” or “expenses only”) or the relevant profession/sector. It states that what matters is whether the agreement or arrangement with an organisation qualifies interns as workers for NMW purposes.
Under NMW legislation, workers are entitled to the NMW, unless an exemption applies. Exemptions may apply to internships. For example, workers undertaking work experience placements not exceeding one year as part of higher education courses do not qualify for the NMW.
The guidance also covers the two separate categories of “volunteers” and “voluntary workers”. It states that volunteers are not workers and are not entitled to the NMW. However, it acknowledges that job titles are not conclusive and volunteers may be workers depending on the arrangements. "Voluntary workers" (i.e. employed by a charity, voluntary organisation, associated fund-raising body or statutory body) do not qualify for the NMW if they do not receive monetary payments, other than reimbursement of expenses actually, or reasonably estimated as likely to have been, incurred in the performance of their duties; or benefits in kind, other than reasonable subsistence or accommodation.
There has been pressure for greater clarity concerning interns' rights. Employers may therefore welcome both the Code and guidance, particularly the latter's NMW worker checklist and case studies illustrating whether workers are entitled to the NMW. However, the core message remains the same: job titles are not conclusive and arrangements should be reviewed to ensure that all aspects of internships are clarified from the outset.
Louise Fernandes-Owen is a senior associate at Field Fisher Waterhouse