Worker or just getting experience?

Our previous blog Plug the Hole, in January raised the fact that employers need to be cautious with those who do work experience for them as they could fall foul of the law if they failed to pay at least the national minimum wage, not to mention the risk of HMRC looking in depth into your affairs.

With so many employers still keeping a tight grip on those purse strings, more and more employers are taking on interns. Between April to September 2010, the CIPD’s Labour Market Outlook found that 21% of employers in the UK planned to hire interns, an increase of 8% on the previous year. The big question though is “are employers really aware of the legal implications of doing this?”

In November 2009 the Employment Tribunal awarded Nicola Vetta who was engaged by London Dreams Motion Pictures Ltd, a film production company, on an expenses only basis, over £2,000 for unpaid wages, including payment of accrued holiday.

There is no official or agreed definition as to what an internship is, although it is generally thought that it means a graduate or student receiving practical experience and or training in the work environment. Previously people have used the phrase work experience but they really do mean the same thing.

If the intern or the person on work experience answers yes to the following questions, then they are likely to be regarded as a worker and are therefore entitled to the minimum wage, currently £5.93 for anyone aged 21 and above (rising to £6.08 in October):-

• Is there a requirement on them to perform work personally?
• Is there a sufficient degree of control exercised over the individual by the organisation?
• Is there an obligation on the organisation to provide work and is there an obligation on the individual to do that work?

There are then other factors which need to be considered:

1. Is the person actually doing work of benefit to the organisation? If they are genuinely shadowing someone and not actually doing the work then they are unlikely to be a worker.
2. How long is the placement? The longer the placement the more likely they are to be a worker.
3. Are they genuinely able to come and go as they please or are they required to perform a certain amount of work? The more obligations on them and requirements to complete certain amounts of work the greater the argument that they are a worker.
4. What hours are they working? The more flexible the hours the less likely they are to be a worker but if they have to work certain hours at a specific place then possibly they will be a worker.

Employers should be aware that internships are likely to be a “hot topic” in coming months, particularly as the governments recent new social mobility and child poverty strategy, Opening Doors, Breaking Barriers, has already led the government to ban informal internships in Whitehall.