Are your 'interns' entitled to a salary?

'INTERNS WANTED' sign pinned to cork board with multiple stationary items surrounding

Employers may be liable to pay 'interns' on temporary placements at least the national minimum wage if the circumstances, including the jobs you give them to do, imply they are 'workers'

There is no legal definition of an 'intern', but it usually means someone who comes into the workplace for a limited time to learn about work and the work environment.

However, a number of legal cases seem to say that an intern who does work that would be paid if done by an employee or contractor can be a 'worker' for the purposes of national minimum wage (NMW) law. If they are a 'worker', you must pay them at least the relevant NMW for their age - even if they are prepared to work for nothing.

Identifying workers

The law defines a 'worker' for the purposes of NMW law as someone who has either:

  • A contract of employment with you.
  • A contract with you under which they must personally perform work or services for you. They must not be able to substitute someone else to do the work and you must not be a client or customer of theirs under the contract (because if you are, they are self-employed). The contract can be expressed (in which case it can be either written or oral) or implied from the circumstances.

There are exemptions, but they are limited. For example, students on work experience for fewer than 12 months as part of their course (but not those working outside their course), students on work experience who are still under the school-leaving age (but not school-leavers working in the UK during a gap year), some apprentices and some volunteers, are not caught.

Each case depends on its facts but, if there is no written contract, an intern is more likely to be classified as a 'worker' for NMW purposes during their placement if:

  • their placement lasts more than a few weeks
  • the placement is likely to lead to an offer of permanent, paid work
  • the employer is obliged to give them work to do, and they are obliged to do it
  • it is real work of the sort a paid employee or contractor would be asked to do
  • the business is relying on their specific skills in the tasks they undertake - for example, a marketing student might be asked to draft a market research spec to put to an external agency
  • they cannot come and go as they please

For example, in one legal case a 21-year old worked on a publishing business' website for two months. She worked from 10am to 6pm each day, and was responsible for managing a team of writers, scheduling articles, training, and hiring new interns. She had been promised payment but, in the event, the business argued she had been working as an unpaid intern.

The Employment Tribunal upheld her claim that she was a 'worker' for the purposes of the NMW, even though she had no written contract. She was clearly doing proper work, of real benefit to the business, which would have been done by a paid employee or contractor if she had not done it. It therefore said she should be paid for her work.

In that case, the intern was doing valuable work. Work can be less valuable but still amount to real work - for example, opening or delivering post, stuffing envelopes or photocopying. However, an intern is unlikely to be a worker if they simply shadow employees, who explain their job. Undertaking health and safety and other mandatory training is also unlikely to create an entitlement to payment.

Employees' rights

Employers must also recognise when the work done by an intern might also make them an employee, so that they are also entitled to employment law rights such as paid holidays, maternity and paternity leave and pay, limits on their working time, and the right not to be discriminated against or unfairly dismissed.

Avoiding claims for payment

If you want to ensure that your interns are not regarded as workers - and become entitled to a wage - make sure that your interns:

  • Do not sign a contract, or undertake work that implies there is a contract, that makes them a 'worker' for NMW purposes.
  • Shadow employees, rather than carry out work of their own.
  • Can come and go as they please.
  • Are not doing work based on special skills they have.

You should also make sure that you do not imply there will be a job at the end of the internship.

If in doubt, take specialist legal advice.

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