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Internships – a good opportunity or a waste of time?

Posted on Aug 16th, 2011 | Employment law

Internships and work placements have been getting some bad press lately. Are they a beneficial experience for both Employers and graduates or potentially unethical exploitation? Here we look at what they offer (and what they should offer!) in more detail.

You can read our Guide to Apprenticeships here.

Research by XpertHR in June 2011 showed that 44% of Employers that offer work experience for students or graduates do not pay them a wage; 38% do not pay expenses and 27% pay neither. When Employers do pay a wage, it is between £2.50 and £10. Placement lengths were typically between eight and 21 weeks, with the longest just over a year.

So in a nutshell, this is the problem – the Employers who do not pay a wage to their interns are potentially breaching minimum wage legislation (for more details see below).

Alongside Employers being seen to use these graduates as a source of cheap labour, there’s also the recurring argument about nepotism being the only way to get a decent placement.

Fed up of the nine to five? Find out more about working for yourself.

So what are internships? They’re called various things but they can be basically classified as:

  • Work experience placements (either organised or unofficial) – while you’re at school and which will generally be unpaid and for short periods of time
  • Work Placements (or Placement Years, Industrial Placements, Sandwich Year) – official placements that are part of a Degree (or other further education) course, often last for an academic year and which usually provide a salary/wage
  • Internships (or Graduate Placements, Summer Internships, Gap years) – during term-time/holidays or when you leave University/College. Here’s where the biggest problems arise – paid or unpaid? See below
  • Plus Volunteering and Work-shadowing opportunities (generally unpaid).

People of all ages are now looking for internships and while the practice of unpaid work experience has been popular for a long time in the arts and media industries in the UK, it’s now becoming more widespread in the IT, Engineering and Legal sectors.

The National Union of Journalists (NUJ) in their campaign ‘cashback for interns’ want at least the National Minimum Wage (NMW) to be paid for all internships. They recently backed a student who had worked for a Web Publishing company for two months and took a case to an Employment Tribunal for non-payment of the NMW and holiday pay. They ultimately won the case (more details below).

However, here’s the crux – for many students and graduates a placement, whether paid or unpaid, is a valuable and necessary addition to their CV – allowing them access to employment and contacts, improved communication skills and a better understanding of the realities of working life. But should you accept an internship if there’s no pay offered? Is it an opportunity not to be missed or a waste of time when you could be earning cash elsewhere?

The National Council for Work Experience has guidelines to help students decide if an unpaid internship is worth it:

  • Clarify your and the Employers expectations of the placement at the start
  • Is the placement valuable in that it gives you insight into a particular industry, improves your skills and clarifies your career aspirations
  • Reconsider the value of the internship as it progresses – if it ceases to supply useful contacts and training opportunities and it feels like exploitation.

All types and sizes of company offer internships – the more prestigious internships will pay reasonable salaries (and will get more applicants!) – and there are many websites that offer placement opportunities in the UK and abroad. The government run the Graduate Talent Pool which offers internships for those who graduated between 2008-11 with a 1st Degree or a Foundation Degree.

How important are these placements for Employers?

Many argue that internships are an important contribution to a company’s talent pool and also help the ongoing image of the company’s brand. Employment4students, say that interns often have the web savviness that can make a real difference to a company website, so small and medium-sized businesses, especially, can really benefit from the fresh and original perspective of an intern. Their advice for Employers is simple: don’t offer mundane work and understand that to pay a student even a token amount (in order to attract good future talent) doesn’t involve a huge outlay. Employers can also support their local community and help develop the management skills of their existing workers by offering placements.

The National Council for Work Experience also provide tips for Employers on arranging placements:

  • Plan in advance to ensure there’s a meaningful project that’s appropriate to the skills of the student
  • Draw up a development plan/job description/project outline, have an idea of what skills you need for the position and help them gain these transferable skills
  • Advertise through your local university careers advisory service
  • Interview and treat work-placement students just as you would any other employee
  • Provide an induction of company objectives, health and safety, key staff
  • Assign a mentor to provide them with guidance. Organise progress reviews and feedback
  • Provide a notice period if the Intern wants to leave early or you want them to leave early.


So should you be paid?

Unfortunately, this is another grey area for employment law! The circumstances where internships can be offered work without pay are limited – ‘real’ interns should not be carrying out a role that is performed by a current worker.

You must be paid the National Minimum Wage if you’re a ‘worker’ (or Employee) over compulsory school leaving age. If you’re a Worker, you’re also entitled to holiday pay, sick pay, Agency Workers Regulations and so on (see our Guide to Your Employment Rights). You can’t waive your rights to the NMW (i.e. choose not to receive it) if you’re entitled to it.

More AWR tips

A ‘Worker‘ is defined as someone:

  • Who works under a contract of employment (written or not), which gives an obligation for the individual to perform the work and an obligation on the Employer to provide the work
  • Who’s rewarded for the work by money OR benefits/expenses
  • Who undertakes to do the work personally, for someone else, and who’s not genuinely self-employed

So, if an Employer advertises for an intern, offering a reward in the form of some payment or some benefit, this would suggest the intern is likely to be a ‘worker’. If the placement offers paid work on completion of it this could point to a ‘Worker’ relationship.

To be eligible for the NMW, it doesn’t matter what your placement/job is called, it matters what you do at work.

In the NUJ case, the Employment Tribunal decided that one of the key factors in deciding whether the student (Keri Hudson) was actually a ‘Worker’, and so was entitled to the NMW, was looking at the actual role she was performing. The Tribunal decided that Miss Hudson’s work, which included hiring, managing and training other interns and scheduling articles, went beyond being trained and was, in fact, a proper job. The Company may still appeal this decision but the NUJ continue to campaign in this area.

Exceptions to the NMW:

  • Volunteers and voluntary workers are an exception, who don’t qualify for the NMW, and we will cover those categories in a separate article on Volunteering here
  • Another exemption under the NMW Act is that if the placement is part of a further or higher education course and lasts up to a year you’re not entitled to the NMW
  • If you’re solely shadowing someone else you are unlikely to be a Worker and so not eligible for the NMW.

And finally

The Chartered Institute of Personnel and Development (CIPD) published a paper recently on internships and proposed a new training wage of £2.50 per hour for apprenticeships and internships, to ensure that organisations could continue to be able to offer these placements. The TUC disagree, saying that all interns should be entitled to the NMW. It doesn’t currently appear that the government will implement a training wage.

The government run a Pay and Work Rights Helpline on 0800 917 2388 which can advise you more in this area.

If you are an Employer and need ongoing professional help with any staff/freelance issues then talk to Lesley at The HR Kiosk – a Human Resources Consultancy for small businesses – our fees are low to reflect the pressures on small businesses and you can hire us for as much time as you need.

Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland

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Written by Lesley Furber

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