Last year, unpaid internships hit the headlines as a result of concerns that these arrangements may be in breach of the National Minimum Wage Act 1998 ("NMW"). In the last tax year HMRC assisted 167
Last year, unpaid internships hit the headlines as a result of concerns that these arrangements may be in breach of the National Minimum Wage Act 1998 ("NMW"). In the last tax year HMRC assisted 167 interns, volunteers and work experience workers claw back £192,808 in unpaid wages. In a further show of force, HMRC announced its intention to investigate 100 companies, including the sporting website Goal.com, after it confirmed that it used a roster of 30 unpaid interns to staff its £18 million business.
As part of the government's continuing crackdown on employers abusing national minimum wage laws, the Department for Business, Innovation and Skills (BIS) has published guidance for employers who offer work experience, internships and other similar placements. The guidance explains that an individual's entitlement to the national minimum wage does not depend on his or her job title, rather whether the arrangement that he or she has with the organisation makes him or her a worker in accordance with the NMW. The guidance is intended to provide clarity, however, it is not binding on the courts and it is unlikely to be the final word on this complex and fact sensitive area.
The guidance also sets out specific exemptions to the entitlement to receive the national minimum wage, for example:
BIS has suggested that over the coming year it will launch a social media campaign, publish a student handout and encourage people to name offending employers for investigation. Watch this space...
As part of the government's continuing crackdown on employers abusing national minimum wage laws, the Department for Business, Innovation and Skills (BIS) has published guidance for employers who offer work experience, internships and other similar placements. The guidance explains that an individual's entitlement to the national minimum wage does not depend on his or her job title, rather whether the arrangement that he or she has with the organisation makes him or her a worker in accordance with the NMW. The guidance is intended to provide clarity, however, it is not binding on the courts and it is unlikely to be the final word on this complex and fact sensitive area.
The guidance also sets out specific exemptions to the entitlement to receive the national minimum wage, for example:
- students working as a required part of a UK-based further or higher education course, providing the placement does not exceed one year;
- people undertaking work experience who are of compulsory school age;
- people undertaking a placement that does not require any work to be performed, such as work shadowing;
- participants in government schemes or programmes to provide training, work experience, or temporary work, or to help in seeking or obtaining work; and
- voluntary workers where the organisation is a charity, voluntary organisation, associated fund raising body or statutory body AND the voluntary worker does not receive any monetary payments - only specified limited expenses and benefits.
BIS has suggested that over the coming year it will launch a social media campaign, publish a student handout and encourage people to name offending employers for investigation. Watch this space...