The Low Pay Commission’s annual report recommends that HMRC needs to take stronger action against employers advertising internships that break the minimum wage law. The report also suggests there’s still confusion over when an unpaid work experience opportunity becomes a work placement that should be paid at least the minimum wage.
It comes just two days after Nick Clegg launched the government’s social mobility strategy in which he promised to end the ‘who you know’ culture - but neglected to say that he himself had received a leg up the ladder.
The debate on whether interns should be paid has been a hot political issue for a while now. Last summer the think tank IPPR suggested that many private sector firms were breaking the law by offering unpaid internships. Then the Chartered Institute of Personnel and Development (CIPD) came out fighting in the intern’s corner in January by saying that treating interns better will help boost the UK’s productivity. On the other hand, the CIPD suggested interns should be paid just £2.50 an hour and should be exempt from minimum wage law - something which the LPC’s report discouraged.
Unpaid internships arguably favour the wealthy. In February there were some red faces in the government after it emerged that senior Tories had auctioned off internships at top City firms to raise money for their annual gala ball. And of course, parliament itself has come under heavy criticism for its notorious intern culture, where MPs regularly employ interns who are expected to work for nothing. A survey by the Unite union found that of the 450 interns in parliament, just under half do not receive food or travel expenses. This amounts to 18,000 hours of unpaid labour every week in Whitehall.
Internships are a tricky subject – on the one hand they provide a young person with valuable experience (now essential for taking the first step into employment). But it also means organisations are getting free labour and some (although not the majority) exploit this. But making interns subject to the same regulations as potential employees might be counter-productive – businesses might decide they’re not worth the bother.