Hiring an intern can be a great move for many companies: they often come with fresh ideas and a new approach to your business. However, most employers looking to take their first intern have questions about pay and regulation.
In this article, we'll go through the common questions that hiring employers come to us with regarding internship salaries and break down what the law says about interns.
Q: Are unpaid internships illegal?
Almost always, yes.
In most cases, you have to pay interns at least the Minimum Wage. The reason this is a contentious issue however is that there are some very specific circumstances when an intern does not have to be paid. If these circumstances do not apply, then you are obliged to pay your intern at least minimum wage – and you are breaking the law if you don’t. It’s that simple.
Q: So when are they not illegal?
When one or more of the following apply:
- The internship is part of a UK-based further or higher education course
- The internship is a school work experience placement (the individual is under 16 years old)
- Your organisation is a charity (or voluntary organisation / associated fundraising body / statutory body)
- The role involves only shadowing someone i.e. they are not doing any actual work.
If one or more of the above criteria apply you are not obliged to pay them.
The intern agreeing to no/a low wage, even in writing, is not enough. Even if they sign a piece of paper waiving their salary, if none of the above apply, you are breaking the law in employing them.
Q: What is the minimum amount I have to pay an intern?
The Minimum Wage.
Q: Remind me - what is the minimum wage?
As of April 2017, the UK Minimum Wage is £7.05 per hour for those aged 21 to 24 and £7.50 per hour for those aged 25 and over.
For a 35 hour working week, 52 weeks per year with paid leave and bank holidays included, this comes out at £12.8k for those aged 21-24 and £13.6k for those aged 25 or above.
But if you’re looking to ‘get away’ with anything at all, you’ve got the wrong end of the stick entirely and probably shouldn’t be employing a graduate. They’ve invested time and money into their higher education and, quite reasonably, expect to be compensated for that.
The TalentPool house view is that £17k is the absolute lowest annual salary we recommend you pay a graduate hire, whether an intern or permanent.
Q: Can I treat an intern as if they are self-employed?
You cannot avoid tax and NI liabilities by treating your intern as though they are self-employed. If asked, it is your responsibility to prove that your intern has an independent business or does not have to personally do the work, but rather can use a substitute.
If the reality is that you are employing an intern, then you must treat them as such, and employ them accordingly.
Q: What employment rights does an intern have?
If your intern is being paid, then they have full employment rights. They are entitled to paid holiday at the usual rate of 5.6 weeks per year. Health and safety law also applies to interns, as do all other working regulations. You must treat your intern in the way that you would treat any other employee, the fact that they are an intern does not exempt them from any of these procedures.
Q: What are the consequences if I do not follow these rules?
An intern has the right to take their employer to an employment tribunal like any other employee.
However, as mentioned above, you should not be looking to avoid giving your intern full access to what they are due. Taking on interns can be a fantastic way to cultivate fresh talent and grow your team - it should be a positive experience for both employer and employee!
Take a look at these websites for more information about internship pay and rights.