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Internships And The National Minimum Wage

06 Aug 2010

Internships And The National Minimum Wage There is a lot happening in the world of internships at the moment and they seem to be hitting the news every day. There could be both positives and negatives for interns depending on how things play out over the coming months.

As things currently stand there are many students working in positions which are, for all intents and purposes, unpaid internships. Legislation on the subject is a slightly grey area and many employers claim that rather than being interns, the students working for them are volunteers. This allows employers to sidestep the National Minimum Wage legislation and get away with paying nothing for what are often very valuable members of the workforce.

By the end of July all five of the Labour leadership candidates had signed a pledge with the pressure group Intern Aware saying that they will make efforts to ensure that interns are paid at least the National Minimum Wage.

As we reported at the end of June, the Chartered Institute of Personnel and Development (CIPD) published a report recommending that interns should be paid at least a training wage of £2.50 an hour.

A further report last week by the Institute for Public Policy Research (IPPR) and internship campaign group Internocracy has gone further and claimed that many unpaid interns and students on work experience could in fact by legally entitled to receive pay even under current legislation. The report says that employment tribunals would settle in favour of interns and even award backpay for any work carried out in the previous six years. If substantiated, that would leave employers open to all sorts of claims from interns past and present.

According to the report, "Private companies will normally be under a legal obligation to treat people employed on internship programmes as workers and to pay them the appropriate minimum wage. Employers often mistakenly believe there is a grey area around internships in the national minimum wage legislation that allows them to take on unpaid interns as long as both sides understand it a voluntary position - but this is simply not the case."

Dom Potter of campaign group Internocracy said that there are now whole industries dependent on ‘the willingness of young people to work for free.’ He also believes that this means that students from wealthier backgrounds have an unfair advantage in the job market.

With new legislation coming into effect at the start of next year, even more students might be affected. As some internships are advertised with national minimum wage pay, new laws on travel and subsistence could also affect the number of placements on offer. From 1 January, employer contributions towards travel and subsistence will not count towards the national minimum wage. So, if internships were to be deemed as subject to national minimum wage law, it would cost employers much more to fund these placements. This might in turn mean that there will be less internships on offer.

Whatever the politics and the remuneration side of work experience and internships, it is still one of the very best things you can do to put yourself ahead of your peers in the market for graduate jobs or other permanent positions. We advertise internships on a regular basis and continue to support them as a valuable part of career advancement.

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