HMRC have been reviewing unpaid internships which may have different National Minimum Wage (“NMW”) rules depending on the exact internship itself.
It is therefore best to know the differences before HMRC comes visiting to tell you.
Outside the NMW Rules
The following fall outside of the NMW rules:
- Students – being those doing work experience of compulsory school age (i.e. under 16) or students required to do an internship for less than one year as part of a UK based further or higher education course;
- Shadows – an internship which only involves showing an employee, with no work being carried out by the intern, who merely observes;
- Voluntary workers – provided they are working for a charity, voluntary organisation, associated fundraising body or a statutory body; and they are unpaid, except for limited benefits such as reasonable travel or lunch expenses.
For all other internships, there is a strong likelihood that the intern will count as a worker and will therefore be caught by the NMW rules. Please note that it is not possible to opt out of NMW by agreeing with the intern that he or she will not be regarded as a worker nor does it matter if the arrangement is described as an internship, a work placement or as work experience. If the person is a worker, NMW will apply.
So what is a Worker?
A worker is essentially anyone who is required to do work for you who isn’t doing it on a self employment basis. Typically, a worker may have some form of contract or other arrangement with you to personally to do work or provide services; has no right (or limited right only) to subcontract the work and is obliged to turn up for work, and for whom you are obliged to provide work for during the term of the arrangement.
Workers are also entitled to certain employment rights apart from the NMW which include statutory paid holiday and rest breaks; not to work more than 48 hours a week; entitlement to statutory maternity, paternity and sick pay and not to be treated less favourably if working part time.