What is the legal status of interns?

Employers need to be careful when recruiting interns into their organisations, in particular if they do not intend to pay them.

Entitlement to the National Minimum Wage (NMW) will depend on whether the individual is a ‘worker’. The Working Time Regulations 1998 defines a worker as someone who has a contract of employment or “any other contract, whether express or implied…whereby the individual undertakes to do or perform personally any work or services for another party to the contract…”

An individual cannot sign away their employment right to the NMW as that right depends on whether they are a worker. In Vetta v London Dreams Motion Pictures [2009] the Claimant had apparently waived the right to remuneration when he had signed an agreement with London Dreams Motion Pictures (the Company) to confirm that he would be reimbursed his expenses only. The tribunal found that this was not sufficient to prevent the Claimant from qualifying for the NMW. The Claimant was subsequently awarded £2,395.44 for unlawful deduction from wages and the failure to pay accrued but untaken holiday. The tribunal found that the Claimant had been carrying out similar tasks to a paid employee at the Company and therefore he had been carrying out a service for the company for the purposes of the Working Time Regulations.

An employer seeking to genuinely recruit unpaid interns has a duty to ensure that those individuals are not treated as workers. An individual that has been taken on to shadow an employee of the company and is therefore not carrying out any work or service because they are simply observing, will not qualify for the NMW. Where an individual is recruited for work shadowing, the arrangements should be clearly recorded. Most importantly, the company’s managers must not treat the individual like any other employee. If they do so, they are likely to fall foul of the national minimum wage legislation.

In Keri Hudson v TPG Web Publishing Limited [2011], it was reported that the Claimant embarked on an unpaid internship and was required to be at work between 10am and 6pm although she had no written contract of employment. As time went by, the Claimant’s responsibilities within the company increased and the tribunal heard that there had been discussions between the Claimant and her employer that she would be paid in the future. However, the company subsequently claimed that she was not entitled to pay as an intern.

The tribunal found the discussions of future work between Ms Hudson and the extent of the duties she performed were sufficient to show that she was a worker and as such, she was entitled to be paid the NMW and holiday pay. The Claimant was awarded £1,024.98 in compensation.

Internships are an opportunity for individuals to gain valuable skills and understanding of a particular sector before deciding if they would like to pursue a career in that field. However, employers should ensure that internships are offered in an open and transparent process. Where work is being undertaken by interns, this should be paid.

Dominic Bonham