Employing Interns in the UK Enterprise Europe Network London December 2010
CONTENTS 1. Introduction 3 2. Nature of internships 3 3. Legal position of interns 3 4. National Minimum Wage (NMW) 4 5. Useful contacts 5 Enterprise Europe Network London, London Chamber of Commerce and Industry, December 2010 2
1. Introduction Internships can offer business and other organisations of accessing talent and can provide a flexible way to employ skilled and committed employees. Interns also benefit from the work experience and opportunity to gain insights into and extend their knowledge of a particular industry in a short space of time. The Chartered Institute of Personnel and Development (CIPD) estimated that more than one in five employers planned to hire interns between April and September 2010. This was an increase from the summer of 2009 when only 13% of employers surveyed by CIPD planned to take on interns. The government has promoted internships through the Graduate Talent Pool initiative which was launched in July 2009 to provide additional opportunities to graduates struggling to find work in the current recession. There is no requirement for these internships to be paid, but it is up to the individual organisation to ensure it is complying with the relevant employment legislation. 2. Nature of internships The Chartered Institute of Personnel and Development (CIPD) has recently drawn up a voluntary code of practice called the Internship Charter which sets out six principles upon which a successful and mutually beneficial internship should be based: 1. Recruitment Interns should be recruited in generally the same way as other employees of an organisation with proper consideration of how their skills and qualifications will fit in with the role they are expected to fulfil. The job advertisement should indicate the length of the internship. 2. Induction The intern should be given all the support necessary to integrate them into the organisation in which they are working. 3. Supervision A designated person should be available to supervise the intern, answer their questions and provide ongoing feedback. This person should be an advocate and act as a mentor to the intern. The supervisor should conduct a formal performance review at the end of the intern s period of service to evaluate the success of their time as an intern with the organisation. 4. Treatment Interns should be treated with the same duty of care and degree of professionalism as other employees. They should also be allowed time off occasionally to attend job interviews or to complete study requirements as necessary. 5. Payment The organisation should cover any work-related expenses incurred by the intern. This includes costs of travel to work and travel to attend meetings or events. 6. Certification and feedback Organisations should provide interns with certification or a reference letter with details of work undertaken, skills and experience acquired and the content of any performance review conducted. 3. Legal position of interns There is no statutory definition of an internship or an intern, but the current legislation can help to clarify the legal position of interns. The key issue is whether an intern can be classified as a worker under the National Minimum Wage Act 1998. Under the Act, a worker is someone who has a contract of employment or any other contract that requires the individual to personally carry out work or services for another party. The contract between a worker and the organisation may be an express or implied contract and can be written or oral. Enterprise Europe Network London, London Chamber of Commerce and Industry, December 2010 3
Under the Act, all workers must be paid at least the minimum wage, unless they are subject to a specific exemption as follows: People doing government-accredited apprenticeships and participating in certain kinds of work-based training schemes Students doing a first degree or teacher training course who are working for up to 12 months as a compulsory part of their course Volunteer workers employed by a charity, voluntary organisation or statutory body Certain other groups such as homeless people receiving shelter in return for work It is not possible to state categorically that all interns are workers. The Institute for Public Policy Research (IPPR) notes the following four characteristics of internships which enable most interns in the UK to be classified as workers and which distinguishes internships from work experience schemes, voluntary work or work shadowing schemes: Internships usually last at least three months and can run for up to six or 12 months Interns are usually expected to work set hours and most work full-time Interns are usually required to complete specific tasks within set time-frames and they may have their performance monitored and evaluated Interns usually contribute to an organisation by undertaking tasks that would otherwise be done by a member of staff, thus making a valuable addition to the regular workforce In addition, the CIPD has stated, that, if an intern is contributing to an organisation, if they have a list of duties and if they are working set hours then technically they should be paid the National Minimum Wage (NMW). These criteria will undoubtedly apply to many internships currently being offered by employers (Internships: to pay or not to pay? London CIPD, 2010) It is not sufficient for an employer to believe that the law allows them to take on unpaid interns as long as both sides understand that it is a voluntary position. The law makes it clear that people employed as interns are entitled to the National Minimum Wage unless they fall into one of the categories of exempt persons listed above. Foreign students who are EU nationals and undertaking an internship in the UK as a compulsory part of their university course, eg, as part of the Erasmus exchange, are exempt from the requirement to be paid the NMW. 4. National Minimum Wage (NMW) The current NMW rates are as follows: 5.93 per hour for workers aged 21 and over 4.92 per hour for workers aged 18-20 3.64 per hour for workers aged 16-17 who are above school leaving age but under 18 These rates may change on 1 October of each year so employers should check the government website at www.direct.gov.uk/en/employment/employees/thenationalminimumwage/dg_10027201 Enterprise Europe Network London, London Chamber of Commerce and Industry, December 2010 4
5. Useful contacts Pay and Work Rights Helpline T: 0800 917 2368 http://payandworkrightscampaign.direct.gov.uk/index.html Advisory, Conciliation and Arbitration Service (Acas) Acas can provide tailored information on statutory and legal obligations that must be complied with when hiring an intern. Acas National Euston Tower 286 Euston Road London NW1 3JJ T: 020 7396 0022 W:www.acas.org.uk Institute of Public Policy Research (IPPR) IPPR 30-32 Southampton Street London WC2E 7RA T: +44 (0)20 7470 6100 E: info@ippr.org W: www.ippr.org Chartered Institute of Personnel and Development (CIPD) CIPD 151 The Broadway London SW19 1JQ T: +44 (0)20 8612 6200 W: www.cipd.co.uk Internocracy Internocracy is an award-winning youth-led social enterprise that works with organisations to promote good practice in the development of internship programmes and also helps organisations to structure and design quality internship programmes both in the UK and abroad. T: +44 (0)7972 878 654 E: hello@internocracy.org W: www.internocracy.org The factsheet was produced by the Enterprise Europe Network London team at London Chamber of Commerce. The Enterprise Europe Network London brings together GLE, London Chamber of Commerce and London Technology Network. The Enterprise Europe Network London is funded by the European Commission and the London Development Agency. We provide practical, hands-on support and information for London s small and medium sized businesses seeking funding, hoping to expand their business into Europe, or wishing to develop (technology) partnerships with other European businesses. For more information please go to: www.een-london.co.uk Enterprise Europe Network London, London Chamber of Commerce and Industry, December 2010 5
Disclaimers Whilst every effort has been made to ensure the accuracy of the information contained in this Guide, London Chamber of Commerce and Industry does not guarantee the accuracy of the information contained therein and does not accept responsibility for errors, omissions or their consequences. Neither the European Commission nor the Executive Agency for Competitiveness and Innovation nor any person acting on behalf of them is responsible for the use which might be made of the information contained herein. The views in this publication are those of the author and do not necessarily reflect the policies of the European Commission. Enterprise Europe Network London, London Chamber of Commerce and Industry, December 2010 6