Businesses back calls for limits to lengths of unpaid internships

Businesses back calls for limits to lengths of unpaid internships

Published: 26th February 2015

Firms including KPMG and PwC, along with campaign group Intern Aware, argue that long-term unpaid internships are bad for social mobility and bad for business.

A group of leading businesses – including accountancy giants PricewaterhouseCoopers and KPMG – has called for the government to introduce a four-week limit to unpaid internships.

The businesses, which were brought together by campaign group Intern Aware, argue that long-term unpaid internships are bad for social mobility and bad for business. They say a four-week limit would provide employers with greater legal clarity as existing employment law makes no mention of internships.

Intern Aware, which campaigns for fair internships, is seeking to influence the outcome of the ongoing government review of employment law, which was established by business secretary Vince Cable in October 2014, and to put pressure on political parties to address the issue of unpaid internships in their manifestos.

The call comes after reports from the Sutton Trust, the London assembly economic committee, and the Social Mobility and Child Poverty Commission all suggested that a four-week limit would provide a solution to the negative effects on social mobility of long-term unpaid internships.

Liam Byrne, the shadow minister for universities, welcomed the call. “We have to put a stop once and for all to the exploitation of young people desperate for work experience,”he said. “Good businesses know things have got to change and that’s why it’s so welcome they’re calling for change. We’re determined to put the weight of government behind them.”

There is evidence of considerable support among MPs for a change in the law. Alec Shelbrooke, the Conservative party MP, tabled a 10-minute rule bill in May 2014 to require employers to pay the national minimum wage after four weeks of work. The Commons voted by 181 to 19 to take the motion forward, an unusual level of success for a private members’ bill.

Recent research for the Sutton Trust suggests that a six-month unpaid internship in London would cost a single person a minimum of £6,081 – a cost of more than £1,000 a month. In YouGov polling for Intern Aware, 65% of British businesses questioned said they would support a four-week limit to unpaid internships, with only 12% of businesses saying they would oppose it.

Chris Hares, campaigns manager at Intern Aware, said that “for too long employers, young people and even [HM Revenue and Customs] have struggled with the ambiguous and unclear place that internships fit into the law”.

The businesses calling for a change in the law also include insurance company AXA UK, global engineering and construction business CH2M Hill, the Public Relations Consultants Association, intern recruitment business Enternships and Pimlico Plumbers.

Richard Irwin, the head of student recruitment at PwC, stressed that internships helped the company to diversify its student intake and promote greater social mobility. “Not only do they allow us, as an employer, to test talent but they allow young people, who might not have considered a career with us, the opportunity to gain access to professional services.”

Francis Ingham, director general at the Public Relations Consultants Association, said that “for those looking to abuse the basic right of being paid for the work you carry out, the method has always been obvious: rely on HMRC’s grey area of a ‘worker’.

“We know what a worker is and those peddling the unpaid labour myth to young people know as well.”

Jo Swinson, the employment relations minister, said it was good to see businesses recognising that “unpaid internships exclude vast numbers of young people and are unfair”, but she said the real issue was that in many cases interns are actually entitled to the minimum wage because they are doing a job and legally are workers.

“The term intern is widely used to mean various things and that’s why we’ve begun a review of employment status which will provide clarity so people know if they’re entitled to the minimum wage,” she said.

She said anyone concerned they have not been paid properly can call the confidential pay and work rights helpline for advice or to make a complaint.