“Are interns entitled to the National Minimum Wage?”
Internships can be a good way of providing valuable work experience and familiarisation with a particular industry or sector. They are common in the charity sector and are also used widely in business.
In assessing whether an intern is entitled to the National Minimum Wage (NMW), it is important to understand that, in law, there is no employment status of “intern”. In order to assess whether an intern is entitled to be paid at least NMW, the organisation must identify the intern’s employment status. If the intern is a “worker”, they ought normally to be paid at least NMW. If an intern has agreed to personally provide services to the organisation and the organisation gives the intern work to do and sets the hours of work, the presumption will be that the intern is a worker and is therefore entitled to NMW.
The law on the national minimum wage is complex and there are several exemptions which may apply depending upon the circumstances of each case. For instance, there will be no entitlement to NMW if the intern is:-
- Work shadowing (as opposed to doing actual work themselves)
- A student on a work experience placement of less than one year as part of their course of study
- Working for a charity in the capacity of “voluntary worker” and in receipt of no remuneration or other benefit other than out of pocket expenses
The “voluntary worker” exemption for charities referred to above is very narrow and readers should note that any payment to the individual over and above the reimbursement of out of pocket expenses is likely to mean that the voluntary worker exemption does not apply and the individual should be paid NMW. It should further be noted that if there is the prospect of a job at the end of the internship or the intern receives training beyond what is necessary to carry out the duties of the post, it is unlikely that the organisation will be able to successfully argue that the intern is a “voluntary worker” and in these circumstances, the intern ought normally to be paid NMW.
There are other exemptions to the general rule that workers ought to be paid at least NMW but the three listed above are among the most commonly occurring and it is not possible to go into detail regarding other exemptions in this short article. Advice should be sought in relation to each particular circumstance.
It is important to note that it is not possible to contract out of the entitlement to national minimum wage so even if someone agrees to work for less than NMW, it will still be illegal to pay less than NMW if the arrangement is such that NMW should be paid.
If an employer has failed to pay NMW when it was due, HM Revenue & Customs have the power to fine the organisation as well as order the employer to make up the shortfall between NMW and what was actually paid to the individual.
If your organisation is thinking of taking on an intern and paying an amount less than NMW, you should seek legal advice on the particular circumstances of your case before proceeding. Taking early advice and ensuring your arrangement is compliant with the law is extremely important, not just for the financial wellbeing of your organisation, but also for its reputation.
Collective Questions is intended as a guide and for general information only and is not a substitute for taking specific advice relating to your situation. For specific advice regarding this or any other issue relating to employing people, please do not hesitate to contact us.
