Avoiding costly consequences
Shockingly, the majority of business leaders are unaware that unpaid internships could be costing companies in the long run. Only 12 per cent of managers understand that for-profit companies may be breaking the law if they offer unpaid placements.
Employing an unpaid intern for long periods of time, regardless of how the job was advertised, the title or contract, for-profit organisations could be breaking the National Minimum Wage (NMW) Act 1998. To date, all interns who have taken their employer to court have won. (You only need to think back to the prominent news story concerning the Poundland court case in February, where a judge ruled in favour of a jobless graduate.)
Libby Page, campaigns and policy coordinator at Intern Aware, a national campaign group for paid internships, reminds employers: “In many cases unpaid internships are illegal as they breach National Minimum Wage legislation that states all workers are entitled to a wage, so by not paying their interns companies could also risk being taken to an employment tribunal and facing legal action and fine. Intern Aware have helped interns claim back money from previous employers and have been successful.
Many employers are also unaware that last December, Labour MP Hazel Blears introduced the Internships (Advertising and Regulation) Bill. This legislation aims to ban the advertising of unpaid internships and regulate the conditions of employment. Said Blears: “In the current economic climate it is all too easy for unscrupulous employers to exploit the hopes and dreams of young people by offering long-term unpaid internships which require them to work for free.
To make this reality takes time. Parliament have yet to hear the second reading of the Bill.
A great option for SMEs to attract talent – without spending money or breaking the law – is to offer traditional two week work experience placements. These allow graduates who cannot afford to work for free on the long term to gain essential industry experience.
Eulogy! a top 15 independent PR agency offers these types of placements throughout the year, helping young people trying to break into the industry. Adrian Brady, CEO and founder of Eulogy! notes: ?Over ten per cent of our workforce started as interns here. They understand your culture from the bottom up and tend to be loyal, as you have given them an opportunity. We get back great enthusiasm and without sounding all high and mighty about it you actually can feel good about giving someone a chance and help them create a job, because it’s not just us who creates it, it’s them too.
There is no denying it – internships are here to stay. They offer a chance for young people to gain key skills and expertise to succeed in business. But current epidemic unpaid internships must stop. Graduates need to be a valued element of an SME’s work force in order to allow Britain to become a great entrepreneurial hub where business can flourish.