Should you be paying your interns?


01-08-2019

Deciding that you would like to welcome an #intern into your business is the easy part. Knowing what to do next can raise several questions. THe HR Dept offers advice on how to stay on the right side of Employment Law...

Summer’s here, and along with the sunshine will come summer interns for many businesses around the UK. But how should you pay them? Do you need to pay them at all?

In order to know whether you need to be paying interns, you first need to establish the correct employment status for the internship that you have advertised. This is because “intern” is not an official status. Depending on the type of internship you are offering, the intern could be entitled to pay and further rights.

What is an internship?

Almost everyone has heard of internships. Perhaps you have even been an intern at some point in your life. But a varied approach to the employment practice over the years has skewed the definition for some. If your own internship was based on tidying up, making the tea and not getting paid, you could be forgiven for thinking that’s normal.

An internship is a fixed period of work experience. It is typically of interest to students, graduates or those seeking a career change. It should provide an insight into a specific field or industry and typically offers on-the-job training. If an intern has performed well during their internship, you may wish to offer them a contract of permanent employment when the internship ends.

An internship is not intended to be used to increase labour or resource by means of little to no budget. A falsely advertised and poorly implemented internship is exploitative and illegal. In fact, to crackdown on illegal internships the Department for Business, Energy and Industrial Strategy has issued thousands of letters to UK businesses who run the risk of landing in hot water by underpaying interns.

Even with the above explanation, we know that employment status can be confusing. So to make sure you remain on the right side of employment law, we recommend a refresh on the rules for offering internships at your business.

When an intern should be paid

UK Government advice states that if an intern is carrying out the duties of a worker, then they are entitled to the National Minimum Wage (NMW) and will be entitled to paid holiday leave.

Exceptions to paid internships

Whilst most internships these days will qualify for NMW, there are some exceptions. Student internships, that last for less than one year, and school work-experience placements do not have to be paid. The student needs to be in full-time education for this to apply.

Although in this instance pay is not a legal requirement, we believe it to be a good incentive.

Other types of internships that don’t require pay include voluntary workers for a charity or fundraising body, and those who partake in shadow work which is for observation purposes only. If the intern is truly a volunteer they will have agreed to work for free and be able to come and go as they please. It has been known for employers to call a worker a volunteer. But be warned, HMRC take a very dim view of not paying NMW.

Do interns need a contract?

We believe it is best practice to have a contract for each person who works for your business, including interns. This is because a professionally drafted contract sets out the employment status and entitlements.

Additionally, contracts are a great way to communicate rules and expectations to workers. If any questions or doubts arise, they should do so before work begins.

If you’re preparing for an intern this summer and have some questions about the process, contact your local HR Dept. We’ll help you legally recruit your new hire and advise on a comprehensive induction and training plan that is unique to your business.

 

Local businesses throughout Cambridgeshire, run by people like you, outsource their HR because it is easier and more cost effective. We tell you what you can do, not what you can’t. We are here to give you practical and sensible help to sort out problems whenever you need us. When you are thinking about how to grow for the future, we can help you put together the ‘people plans’ to enable you to be even more profitable tomorrow.

HR Dept.