Are Unpaid Jobs and Internships Actually Legal?

In recent years, more and more people have been falling victim to employment-based scams which act outside of the law. Keen to gain experience, many candidates will accept poor treatment and pay in order to pursue their desired line of work.

But is it all worth it in the long-term?

A survey conducted by the Sutton Trust revealed that, ‘31% of university graduates working as interns are doing so for no pay.’ Looking at the financial repercussions of this for a graduate, the survey also discovered that:

A six-month unpaid internship will cost a single person living in…

• …Manchester a minimum of £4,728 (£788 a month) excluding transport costs.
• …London a staggering £5,556 (£926 a month) excluding transport costs.

When querying people’s opinions on the cost of such schemes, ‘70% of people aged 16-75 agree unpaid internships are unfair because only people from wealthy families are likely to be able to work for a significant period without pay.’

But are unpaid positions actually legal?

To gain an insight into the legalities of unpaid job positions, we interviewed five different graduates on their experience, then asked London-based firm, Savoy Stewart, to comment from a legal perspective.

 

Community Street Fundraiser – commuting from Southport to Liverpool

“We were expected to report back to our central office every day for debriefing – none of our travel expenses were covered.”

Total loss: £150
Approximate cost living away from parents: £920.00

Description: Our job description described the position as “directly market to customers on a face to face basis at various venues.” In reality, once the podium had been set up, our superiors would actively encourage us to break the rules and regulations allowing us to be there. For example, after pressuring people into signing up for things, our superiors would encourage us to wander from the agreed area to target more people elsewhere.

We were denied any form of break and had to work through our lunch hour. Different levels of commission were awarded based on the employee’s age. This started from £5 and the most that was given was £25 per signing. Owing to the fact I didn’t enjoy pressuring the vulnerable people we were regularly targeting, I made a grand total of nothing.

Salary: £0 (Commission of £5-25 per signing)

Hours worked: Travelling from 6am, I’d arrive at work at 7am and be sent to a certain location to work until 6pm in the evening. We were then expected to return back to the office for debriefing (none of our travel expenses were paid). Following this I would travel back home, arriving at approximately 9pm.

Duration: 2-3 weeks.

Legal: No.

According to ukjobsguide.co.uk employers, by law, have to ensure that you are given at least the National Minimum Wage for every hour worked. Commission can be used to make up this rate of pay, but it cannot be used as an only form of payment if it falls below the hourly rate that would be achieved by National Minimum Wage. Commission-only jobs are perfectly legal, so long as employers respect National Minimum Wage legislation. The individual in this case did not achieve this rate of pay.

Age discrimination laws were also broken, giving preference to older workers in terms of pay.

Other non-pay related laws were also flouted. The employees were not allowed a lunch break and were encouraged to move the podium from the agreed position.

Magazine Editorial Intern – commuting from Elstree to London

“My parents encouraged me to take the job to gain experience and have something that stood out on my CV, saying they’d help me out financially. It’s true, if I hadn’t have worked for free, someone else would have”

Total loss: £61.60
Approximate cost living away from parents: £1441.60

Description: I was an editorial intern for a print magazine company. My role entailed writing articles, researching trends, asking PR agencies for campaign images and attending daily meetings. I was expected to work a full day.

Salary: £0 (Given £15 expenses to cover food and travel).

Hours worked: I would leave the house at 7am and arrive into Central London offices before 8.30am to start the working day. You were given an hour for lunch and I was only given £5 expenses for lunch. I had to keep all receipts with me and I was reimbursed on a weekly basis. My hours were from 9am-5pm and I would only get home by 6.30pm, sometimes 7pm, depending on the trains.

Duration: One month – I was asked to stay on, but chose to leave.

Legal: Yes.

Since the intern was not promised a verbal of work, had been working for less than a year, and had no written contract the company could fairly claim that the individual was a legitimate unpaid intern.

Waitress in Loughborough

“When I asked what salary I’d be on, they replied ‘won’t you still work for free?’ When I said no, they retracted their job offer.”

Total loss: £0 
Approximate cost living away from parents: £760.00

Description: I was given a free trial for a position waitressing at a local restaurant. At the end of the two-week trial, I was given my shifts for the following week. I asked if this meant that I had gotten the job, to which they replied yes. I then asked what salary I would be on they replied with “won’t you still work for free?” When I said no, they retracted the job offer. A couple of weeks later, a friend of mine also trialed at the restaurant. They did exactly the same to her. It would seem that they have a regular stream of free labour.

Salary: £0 (It was a free trial).

Hours worked: I worked shift patterns, namely 11-5pm or 3:30pm-10:30pm.

Total loss: £0 – I cycled and live with my parents.

Duration: 2 weeks.

Legal: Unclear.

The employee could contest the decision by the company on the following grounds:

As stated on Gov.uk:

Legally, a work trial must:

• Have the length of the trial agreed upon in advance

Employers can’t evade the law regarding National Minimum Wage by:

• Claiming that it doesn’t apply.

• Writing out an agreement with their employee to say that they are not an official worker, or that they are a volunteer when they aren’t.

The length of a work trial

‘You can offer a work trial if the job is for 16 hours or more a week and lasts at least 13 weeks. The work trial can last up to 30 days.’

As the employee’s trial had been agreed upon in advance (a two-week trial) it is unlikely that the employers in question would be able to defend their decision, in legal terms, if it had been contested by the individual. When acting with all the responsibilities of a regular employee, the individual should be entitled to National Minimum Wage.

Sales Assistant in London

“Our pay slips were fixed on a certain number because our hours would vary and our employer couldn’t be bothered to change it to the correct amount.”

Total Loss: £80-100
Approximate cost living away from parents: £1699.00

Description: “We weren’t given a contract. Our pay slips were fixed on a certain number because our hours would vary and our employer couldn’t be bothered to change it to the correct amount. He used to deduct money from our pay (which was cash in hand), saying the till was short. However, we never touched the money and he was the first in to count it up. We didn’t sign any forms to confirm he could touch our pay, so I’m sure he was breaking some form of law somewhere.

Salary: Minimum wage.

Hours worked: Part-time, between 20-25 hours per week.

Duration: 4 months.

Legal: No.

In this example, it is apparent that the following employment law was broken:

As noted on Gov.uk:

Employers are not permitted to make a deduction from your pay or wages unless:

• The law specifies or allows it, e.g.: National Insurance, income tax or student loan repayments.
• You consent in writing to the deduction
• It is written in your terms of contract
• It due to statutory disciplinary proceedings
• You have a statutory payment due to a public authority
• You have been absent from work whilst taking part in a strike or industrial action
• The deduction relates to an earlier overpayment of wages or expenses
• It is due to a court order

 

Frequently Asked Questions

When is it okay to work for free?

1. When working as an intern for a specified period of time
2. When working as a volunteer

When should an internship be a paid one?

As noted on Gov.uk:

If an intern is promised a contract of future work, they are officially classed as a worker and should be paid National Minimum Wage. They should also receive NMW if they have worked a year or longer with the company.

When should I be paid National minimum wage?

If your position is not a voluntary post, work experience or, an internship (of under one year); you should be entitled NMW pay.

I’m losing money at my job – is this legal?

You are entitled to the National Minimum Wage unless you are working as an unpaid intern, for work experience or as a volunteer.

Are pyramid schemes legal in the UK?

No, they are viewed as a form of fraud owing to their unsustainable nature. For more information: actionfraud.police.uk

I’ve just been scammed – what do I do next?

As cited on actionfraud.police.uk:

• Contact Action Fraud.
• Cut off any form of contact with the fraudsters.
• Tell your bank and do not make any further payments to the fraudsters.
• Gather any documents or emails you’ve received with written communication relating to the scam.
• Keep an eye on your accounts. Your information may be shared with other fraudsters.
• Do not fall victim to recovery fraud – these are fraudsters who convince people that they will reclaim what you have lost or help you for a fee.