We abolished slavery in the 19th century and introduced a national minimum wage in the 20th, so how can it be, in one of the richest places on the planet, in the 21st century we still ask tens of thousands of people, often young people, to give their labour for free? “A nation that works for everyone” is an aim I wholeheartedly agree with but in order to achieve this we must have a nation where work is recognised and appropriately remunerated.
It is for this reason that I set out my Private Member’s Bill to prohibit unpaid work experience exceeding four weeks. I believe that in Britain, when we are at our best, we uphold the values of fairness, dignity and respect. It also seems completely clear to me that, even if you don’t care about the values, this is also about talent. Why, as an organisation, or a society, would you want to limit access and not draw from the widest pool of the brightest and the best?
Internships have become a prominent and problematic feature of the United Kingdom’s jobs landscape. For many professional careers, there is now an expectation that prospective employees will go through an internship (or even several internships) before starting a full-time paid role. They provide access to the most in-demand careers, but are too often unpaid and not advertised.
Recent analysis from the Sutton Trust show rising rents and inflation mean an unpaid internship now costs a single person living in London a minimum of £1,019 per month. With many internships several months in length, taking on a six-month internship in 2018 would cost a young person £6,114. Current estimates are that 10,000 graduates are in unpaid internships six months after graduation, though many more will do them at other times. Over 40 per cent of young people who have carried out an internship have done at least one of them unpaid.
Shockingly, unpaid internships are a growing problem in the UK. Research by IPPR last year found that the total number of internships offered have consistently risen each year since 2010 (by as much as 50 per cent in total).
Each year, there are up to 70,000 interns in the UK. Nearly half of employers report that candidates who have not gained work experience through an internship will “have little or no chance of receiving a job offer” for their organisations’ graduate programmes, regardless of academic qualifications.
I believe a change in the law is required to end the uncertainty that exists for interns and employers and close the current loophole which means that the law is not enforced effectively. Many interns are likely to fall under the definition of “worker” under the National Minimum Wage Act of 1998 and so are legally entitled to be paid the national minimum wage. However, over a quarter of businesses (26 per cent) admit to paying interns less than the minimum wage or nothing at all.
Whilst, in theory, interns can contact the government’s pay and work rights helpline or take the employer to tribunal, it is both a brave – and well-informed – intern who takes such action. There is an understandable fear that doing so will lock them out of the very industry that they are trying to access contacts, references and experience in.
Furthermore, the legal uncertainty means that the intern cannot be sure of winning any case they were brave enough to take. Some employers may not know their obligations, but many get away with the practice of not paying as they are fully aware of legal loopholes and a lack of tough penalties.
Under the National Minimum Wage Act, someone only counts as a worker if it is clear that both the firm and the individual have obligations to each other. Someone might work in an organisation for three months as an intern and yet the employer could deny that there was an obligation on the individual to attend every day or to give notice that they no longer planned to attend and therefore that the arrangement placed any obligations on the intern.
The government has argued that the current law is sufficient and therefore no change is required however the government also recently admitted that there had been no prosecutions in relation to interns and the national minimum wage.
The purpose of my bill is to provide clarity and certainty to both interns and employers and to ensure that all internships are paid from four weeks (20 working days). Of course, any shorter internship must also be paid if the intern meets the definition of “worker” from day one. The only exceptions would be arrangements that are currently excluded from the national minimum wage act because, for example, they form part of a sandwich year from university or involve charity volunteering. If you are undertaking genuine work experience, of which I am completely in favour, this is valuable but cannot extend beyond four weeks.
By paying interns, businesses will have access to a larger, more diverse talent pool since it will include those who currently cannot afford to take up internships and are therefore unlikely to apply or be taken on by the business. This is one of the most fundamental issues that has blighted Britain for decades: talent is everywhere, and opportunity, currently, is not. Unpaid internships perpetuate this iniquity.
A further benefit to employers who pay interns is that they are more likely to recruit them – 46 per cent of employers who paid interns found it a useful method of recruitment, compared to 32 per cent for unpaid interns.
In thanks to the excellent campaigning work of various organisations, and perhaps also in response to this bill, I am pleased that the government last week launched a crackdown on unpaid internships, sending more than 550 warning letters to companies and setting up enforcement teams to tackle repeat offenders. HM Revenue & Customs is expected to target sectors such as media, the performing arts and law and accountancy firms and will also issue guidance to employers spelling out when they are legally obliged to pay at least the national minimum wage to interns.
I sincerely hope this initiative makes a difference but would urge readers to consider two actions if they would like to see more concerted action and support this change in the law: first, join the conversation on social media using #payinterns and second, contact your MP to encourage them to support this bill when it comes to the Commons.
My hope is that with this bill we can finally put an end to this pernicious practice which inhibits social mobility and is a stain on our society.
I will conclude with the words of those who have suffered the experience of unpaid internships, as it is those that really matter. “You can’t buy food with exposure” or “pay the rent with a glowing CV”.
Chris Holmes was made a life peer in 2013, taking the title Baron Holmes of Richmond.