Is your firm distinguishing correctly between interns, employees and work experience?

Unpaid internships have been a hot topic of discussion among companies receiving HR advice from Employee Management Ltd (http://www.employeemanagement.co.uk), with even Nick Clegg’s old school, Westminster, being criticised by the deputy prime minister after it emerged that it had auctioned internship placements at companies like Coutts and Faberge. Meanwhile, former footballer Ronaldo hit the headlines in May when it was revealed that he was taking a London internship of his own.

Even the winner of the World Cup for Brazil was apparently content to “make tea, do photocopying and carry his boss’s bag”, according to The Sun, which perhaps highlights how seemingly everyone now wants to undertake an internship. But unpaid internships can come with a big price, not only for those undertaking them for whom the travel and accommodation expenses may simply be beyond them, but also the businesses that fail to appropriately determine who should get paid, and how much.

The stakes are especially high in recent times for those HR training clients that get the judgment wrong, given HMRC’s clamping down in this area. June saw nine British companies being ordered to hand over fines and payments, amounting to almost £193,000, to interns who had been working for free. Among them was the owner of the Top Shop brand, Arcadia, which had initially offered fashion interns only a Travelcard and £2.50 lunch allowance in return for head office work. Meanwhile, a marketing intern at Harrods received a back payment of £1,800 last year.

The issue is not going away any time soon, with Jo Swinson, the minister for employment relations, stating that the government was investigating how it could “name and shame” those companies failing to comply with the law – despite the Liberal Democrats themselves only beginning to pay their interns last year after a similar controversy.

Nor is it difficult to understand the confusion over the issue among those firms benefitting from HR services, with few of them wilfully intending to exploit young jobseekers. Many may simply be confused about the relevant legal and ethical boundaries, given the shift in trends in recent years. Where an employer may have once offered a month’s work experience, they may now be offering a several month internship. But there is no legal definition of an internship, and the government’s national minimum wage guidelines draw only one relevant distinction - between a “worker” and a “volunteer”. This is applied by HMRC when it considers cases against employers.

Such ambiguity only highlights the importance of the best employment law advice for those firms considering interns. The law states that where there is an employment contract or any other contract under which the intern agrees to work, they are a “worker” – but this does not need to be in writing. An employer may also consider a paid internship as an alternative.

Simply contact Employee Management Ltd (http://www.employeemanagement.co.uk) today about possible employment contracts and other factors that can determine whether you are on the right side of the law when using interns.

Editor’s Note: Employee Management Ltd (http://www.employeemanagement.co.uk) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.