Employment Law Update (November 2009)
So, what exactly is an intern?
Employers may be intrigued to hear radio advertisements talking
about businesses taking on graduate "interns" to benefit their
business, as part of the government's help for newly qualified
graduates. In the current economic climate, new graduates are
finding it increasingly hard to find work and the government is
promoting this form of work experience as a potential benefit to
both graduates and businesses.
"Intern" is a new arrival in the vocabulary of employment law,
and readers may be more familiar with it as a term used to describe
a young person associated with the former president of the United
States, Bill Clinton. But what place does an "intern" have in UK
businesses? And more to the point, what are your obligations as an
employer if you take one on?
Impact of the National Minimum Wage
The main barrier to taking on an "intern" is the requirement in
the United Kingdom to pay at least the National Minimum Wage (NMW),
currently £4.83 per hour, for workers aged 18 to 21 and £5.80 for
workers aged 22 and over.
There are no specific "opt-outs" for workers described as
"interns" and because the NMW applies to a wide range of "workers",
not just employees, the NMW is very likely to apply. Indeed, the
government recommends that in most cases when an "intern" is taken
on, at least the NMW should be paid.
In fact, to avoid the requirement to pay the NMW to an intern,
an employer would have to:
- Make sure the intern does no real work;
- Keep the assignment short – a few weeks;
- Take care not to offer the intern permanent employment at the
end of the placement, as it might be seen that the intern should
have received pay during the course of the assignment.
The problem with taking this approach is likely to be that the
placement offers little of value to either the intern or the
business.
What about employment status?
Another area for businesses to consider is the likely employment
status of an intern. Employees have certain rights, including the
right not to be unfairly dismissed, and in some cases these rights
apply from day one of employment.
One problem with the issue of employment status is that there
can never be absolute certainty about an intern's status, even if
the worker and the business set things out in writing at the
outset. This is because workers can make a claim for employment
rights in employment tribunals and tribunals are free to look at
all the circumstances when making a ruling on the matter.
Tribunals are increasingly prepared to find that a worker is an
"employee" even when there is paperwork to say he or she is
not.
Interns – a summary
- Think carefully before taking on an "intern". Their expertise
could benefit your business on the one hand, but if your business
does benefit, the intern is likely to be considered to be doing
"work" and you are very likely to have to pay at least the National
Minimum Wage;
- Always take advice before you take someone on as an "intern",
to make sure you are clear about your rights and
responsibilities.