It’s not always straightforward to determine interns’ rights. Businesses may be required to pay interns. It depends on what the intern is doing and their classification.
Workers and employees, generally, have certain rights, such as entitlement to the minimum wage and paid annual leave. Employees also have additional rights, such as the right to statutory sick pay and protection from unfair dismissal (normally subject to two years’ service). It’s therefore important to determine whether the intern could fall within one of these two categories.
For worker and employee status there needs to be “mutual obligation”, which is a minimum requirement for a contract to actually exist. This means that each party must have an obligation to fulfil their side of the bargain. The question is: does the business have an obligation to provide work and is the intern obliged to turn up and work?
To be deemed a worker, the individual must also be obliged to provide work or services personally, rather than sending another person in their place, and they must not be providing the work or services as a business.
To be considered an employee, again the work or service must be done by the person under contract, but there also needs to be an element of control by the employer over the employee. Other factors for determining status could be considered, too.
What is written in the contract or internship agreement does not determine status, and it’s what’s happening in practice that counts.
The intern arrangement
Where the business is providing set tasks which the intern is obliged to carry out, the intern will usually be a worker and, in most cases, must be paid.
By contrast, interns that have looser arrangements with the organisation and shadow (rather than perform set tasks), could fall outside the worker protection.
The National Living Wage (NLW) and National Minimum Wage (NMW)
There are a few exceptions to NLW or NMW entitlement though.
One of the exceptions is work experience placements not exceeding one year undertaken by students as part of a UK-based higher education or further education course.
Another exception is voluntary workers who work for charities, voluntary organisations, associated fund-raising bodies and statutory bodies. They are not entitled to a minimum wage provided certain conditions are met. They must not receive payment other than reimbursement of expenses incurred or reasonably estimated. They also must not receive any benefits in kind other than reasonable subsistence or accommodation.
No legal obligation
There is a good reason to pay interns even when you don’t legally have to. If you don’t offer payment you may well be excluding able people who can’t afford to do an internship for free. By offering to pay interns you’re widening your pool of talent.
This guide is intended for guidance only and should not be relied upon for specific advice.
Do check mattgingell.com regularly for updated information.