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Kate Thompson

Stevens & Bolton

Associate

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Legal Insight: Working through the internship issue

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Interns Anonymous recently revealed that 50% of the 647 interns it surveyed had completed at least two placements, with 86% indicating that each had lasted longer than a month.

Given the apparent confusion about the legal situation surrounding internships and the fact that their popularity is continuing to mount, it is essential that HR professionals understand the implications if they are to avoid falling foul of the law.
 
National minimum wage considerations
 
It is now more important than ever that employers ensure that interns are paid at least the National Minimum Wage, where required by law. Earlier this year, the Government emphasised that it was committed to ensuring the enforcement of the NMW for interns and stated that HM Revenue & Customs was considering targeted enforcement in sectors where such placements were commonplace during fiscal year 2011/12.
 
This means that, in order to reduce the risk of triggering an investigation, HR professionals must evaluate whether their interns are entitled to the NMW before advertising any role. The aim is ensure that they do not advertise any positions as unpaid if, in reality, they should be.
 
In general terms, interns are entitled to the NMW if they are above compulsory school age, not undertaking the placement as part of a UK-based higher or further education course and would be regarded as a ‘worker’. They would be considered as over compulsory school age if their placement started after the last Friday in June of the school year in which they reached the age of 16.
 
They would also likely be classed as ‘workers’ if they undertook more than simply work-shadowing, were obliged to provide their services personally and to carry out work as instructed by an employer. Worker status is also indicated if there is an obligation on the part of the employer to provide them with work during the course of the placement.
 
Moreover, interns may also qualify for the NMW if their placement could, on completion, lead to an offer of permanent or paid work. The idea here is that the promise of such paid work acts as a form of reward for services rendered.
 
When determining entitlement to the NMW, meanwhile, tribunals and courts will evaluate existing arrangements between employers and interns. This means that the former cannot escape an obligation to pay simply by stating in their contract that the intern is not a worker and, therefore, not entitled to the NMW.
 
If employers do not wish to pay, they must ensure that placements are arranged in such a way that interns are genuinely not workers for the purposes of the NMW. This would see their activities being restricted to work-shadowing, for example.
 
In addition, when structuring interns’ pay, HR practitioners should note that expenses or allowances for food, travel or clothing do not count towards wages for the purposes of the NMW.
 
Working time and holidays
 
If an intern is regarded as a ‘worker’, then he or she will have a pro-rata entitlement to statutory holiday, which will accrue during the course of the internship.
 
Should such circumstances apply, limitations on working time will also need to be observed. Unless interns have expressly opted out of the weekly limit, their average working time, including overtime and time spent working for others, should not exceed an average of 48 hours per week over a 17-week period.
 
Interns who are over compulsory school age but less than 18 years old also cannot work more than eight hours in any one day and 40 hours in any one week. It is not possible for younger interns to opt out of these restrictions.
 
As some individuals may be undertaking several work placements at once, however, HR must also ask those who have not opted out of the weekly working time limit for details of any work, including internships or work experience, that they are undertaking for other employers as well as the total number of hours that they work each week.
 
Even where interns have opted out of the weekly limit, employers have a duty to protect their health and safety and should not require them to work excessively long hours if such a situation would put them or others at risk.
 
All interns that are classed as ‘workers’ will likewise be entitled to minimum daily and weekly rest periods, although those over the compulsory school age but under 18 years old will have a greater entitlement to breaks.
 
Immigration checks
 
Another area worth considering is the right of interns to work in the UK. Employers may be liable for civil penalties if they negligently take on a non-European Economic Area migrant who does not have the correct visa status, for instance.
 
Civil penalties only apply to those employed “under a contract of service or apprenticeship”. But as questions of employment status are notoriously difficult to determine, HR professionals would be best advised to check all prospective interns’ documents prior to their first day of work.
 
If the correct checks are carried out, they will be in a stronger position to establish a statutory excuse in relation to a civil penalty should it later be discovered that an intern was not, in fact, entitled to work in the country. But such checks should cover all prospective interns in order to avoid allegations of discriminatory treatment. 
 
Discrimination
 
Interns are protected against discrimination as they are ‘workers’ and/or persons seeking or undertaking vocational training in the workplace.
 
As well as ensuring that they are not subjected to discrimination during their placement, employers should also ensure that their recruitment practices do not discriminate against prospective interns on any of the protected grounds covered by the Equality Act 2010.
 
In the current economic climate where large numbers of people are unemployed, HR should be particularly alert to situations of discrimination against older workers who may wish to undertake an internship as part of a career change.
 
Advertising positions only in universities or specifying that undergraduates or recent graduates are required may indirectly amount to discrimination, for example. Such a practice would be unlawful unless it could objectively be justified that it was a proportionate means of achieving a legitimate aim.
 
Kate Thompson is an associate in the employment and immigration team at law firm, Stevens & Bolton.
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Kate Thompson

Associate

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