Internships - to pay or not to pay?

News on 26 July 2018

To pay or not to pay? That is the question.

“We are thinking of taking on an intern. Should we pay them?”
Before you take on an intern in your business, you need to consider our top five “who, where, what, why and when” points.

The Law

Interns don’t have a special separate employment status. This means that they are more than likely to be ‘workers’ in UK employment law. This can be confusing for employers and interns, but there are some straightforward guidelines which will help you identify whether you need to pay your intern or not.
If the intern is a worker then there are a whole set of employment rights that the intern will be entitled to.
For example, the intern would be entitled to:
  • The right to be paid national minimum wage;
  • Protection from unlawful deductions;
  • A minimum of 28 days annual leave in a full leave year;
  • The right to rest breaks, including 20 minutes rest every 6 hours;
  • The right not to work more than 48 hours a week; and
  • The right not to be discriminated against.
1. Who is the intern?
  • If your intern is completing a work experience placement for school, then you will NOT have to pay them
  • If the internship is part of a UK-based further or higher education course and will last longer than 1 year, then you will NOT have to pay them
2. Where is the intern going to work?
  • If your organisation is a charity, a voluntary organisation, an associated fund-raising body, or a statutory body, the intern will be classed as a volunteer. This means you will NOT have to pay them. Having said this, a few years ago there was a bit of an outcry when the London Zoo (a charity) advertised an unpaid 6 month internship for someone with a Masters Degree with expenses of just £5 a day The real issue with this is that unless the individual is funded by private money (or bank of Mum and Dad) most people could not afford to live and work in London without being paid a fair wage.
  • If you are a sole trader, partnership or limited company or a public sector organisation then you should be paying your intern.
3. What will the intern be doing?
You need to consider what the intern will be engaged in doing during the internship.
  • If they have set tasks to do, they would be classed as a worker. This would mean you HAVE to pay them
  • If they work on set days / times and they have to come in whether they want to or not, they would be classed as a worker. This would mean you HAVE to pay them
  • If you are leaving them to complete work unsupervised, it would be similar to how you treat your employees. This would mean they are a worker and you HAVE to pay them
  • If you are giving them deadlines by which they have to complete work, then again you are treating them in the same way that you’d treat one of your employees; making them a worker. So, you’d HAVE to pay them
  • If they are carrying out the same work that a paid member of your staff would do, they would be seen as a worker. You HAVE to pay them. 
  • If they are just work shadowing an employee of the organisation, then it is likely that you will NOT have to pay them.
4. Why are you interested in having an intern?

Lots of organisations use internships as an opportunity to give potential employees some work experience, whilst also getting a chance to see the intern in action and to see if they fit well in the organisation. It is a good way of having a good recruitment pipeline. 

5. When will the internship run?

Internships can be worked either part time or full time for an organisation and are usually for a fixed time period.   Undergraduates or graduates might be engaged in an internship in order to gain some practical work or research related experience. Whilst there is no fixed time period for how long an internship lasts, the organisation must keep in mind what is reasonable under the circumstances.
By only offering unpaid internships, you are possibly excluding good candidates from less wealthy backgrounds. Doing this could mean you miss out on good candidates, and potentially your next star employee.

If you have an intern who is undertaking useful work for you, then in our opinion the right thing to do would be to pay the intern at least National Minimum Wage. If they are simply shadowing members of your team to meetings or something similar, then an unpaid internship is justified.