With academic terms now coming to an end in schools and further and higher education establishments across the UK, the season of the internship (often called "summer/work placements", "work experience" or "volunteering") is now upon us. We consider below the common legal pitfalls for employers engaging interns and how these can be avoided.

Establishing status

Unhelpfully there is no single statutory definition for the status of someone who carries out an internship. Government guidance has made it clear that simply labelling a job "intern" or "volunteer" does not necessarily exclude that person from being classed as a "worker" in terms of the Employment Rights Act 1996.

A "worker" is someone who is engaged under a contract to personally provide services to an employer and in respect of which there is mutuality of obligations between the parties. Where the intern is also a "worker", they will have numerous employment rights such as right to annual leave, rest breaks and, perhaps most importantly, the right to be paid the National Minimum Wage (NMW).

Employers should carry out a proper analysis of whether the arrangements may give rise to "worker" status, particularly if considering taking on the intern on an unpaid basis.

Pay

Voluntary workers are excluded from the NMW, but not all "volunteers" are voluntary workers in terms of the law. Voluntary workers are a category of worker who carry out work for charities, voluntary organisations, associated fundraising bodies and statutory bodies. They receive no payment other than basic expenses for travel or food and typically do not have a formal employment contract.

The same is generally true for interns. Certain forms of internships such as work shadowing, where no actual work is done, or placements of less than a year undertaken by students as part of their course, are specifically exempt from the NMW. However, if the internship is not part of a course, and the intern is over the compulsory school age, then they are likely to qualify for the NMW.

The illustrative examples given in the government guidance are helpful for employers to identify when the NMW is required to be paid. We have set out an extract below – the full guidance can be accessed here.

Internship with an oral agreement:

Lucas takes up an internship at a newspaper business. He agrees orally with the editor that he will work personally for four days a week from 9am to 5pm and will undertake research activities as directed. He receives some payment for working the agreed hours.

Lucas has made an oral contract with the editor and should be paid at least the minimum wage.

Work shadowing:

Sayeed, a university student, arranges two weeks' work shadowing at a local company. This is unrelated to his studies. At the company, Sayeed shadows team members in different parts of the organisation and learns about the company. His activities are limited to observing, listening and questioning. He does not receive any payments, but can claim travel expenses.

Sayeed does not need to be paid the minimum wage because he is not a worker for minimum wage purposes.

Individuals taking part in work shadowing are not performing work.

On the topic of pay, there is a general trend towards abolishing unpaid internships and so employers should give consideration to whether the internship should be paid in any event. We have blogged about this in the past (please click here to access our articles).

Written terms

Internships or placements are typically intended to give a young person some experience of the workplace. There is no legal necessity to have a written agreement with a volunteer or an intern. However, having something in writing which lays out expectations and learning objectives is very helpful. Typically such an agreement will be a short, straightforward document which also identifies the intern's role, any training or induction that will be given, whether the internship will be paid, any expenses that will be covered and any practical health and safety information that may be relevant.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.