If you or your organisation offer work experience, including ‘placements’ and internships, you need to consider if the person who will work for you is entitled to the National Minimum Wage (NMW) or National Living Wage (NLW). Both are referred to here as minimum wage.
It is your responsibility to decide whether the person is a worker for minimum wage purposes and, if they are, whether an exemption applies to them.
Failure to pay the minimum wage to someone who is entitled to it is against the law. If an unpaid person claims that they are owed minimum wage arrears, you must prove that they are not a worker or that no arrears are owed. Someone’s entitlement to the minimum wage depends on the contractual relationship with their employer, not their job title.
What is work experience
The term ‘work experience’ generally refers to a specified period of time that a person spends with your business, during which they have an opportunity to learn directly about working life and the working environment.
Some work experience positions offer people the chance to try their hand at particular tasks, others simply provide an opportunity to watch and learn. The nature, length and arrangements for work experience vary greatly. Someone’s entitlement to the minimum wage will depend on whether the work experience offered makes the individual a worker for minimum wage purposes.
What counts as an internship
Work experience can be called a ‘placement’ or an ‘internship’. Internships are sometimes understood to be positions requiring a higher level of qualification than other forms of work experience, and are associated with gaining experience for a professional career. However, the term ‘intern’ has no legal status under minimum wage law. Entitlement to the minimum wage does not depend on what someone is called, the type of work they do, how the work is described (such as ‘unpaid’ or ‘expenses only’) or the profession or sector they work in. What matters is whether the agreement or arrangement they have with you makes them a worker for minimum wage purposes. See ‘Who gets the minimum wage’.
Some forms of work experience, including placements and internships, may be referred to as ‘unpaid work’ or ‘expenses only’, where someone gives their services free of charge in order to develop or maintain their skills. Organisations offering such positions should check if the person is a volunteer for minimum wage purposes or if an exemption applies. If the person is not a genuine volunteer and is not exempt, then you must pay them at least the minimum wage.
Exemptions in the legislation relevant to work experience
Some people are not entitled to the minimum wage because there is a specific exemption in the rules.
The exemptions relevant to work experience are:
- students working as a required part of a UK-based further or higher education course don’t qualify for the minimum wage if their placement with you or your organisation does not exceed 1 year. The exemption does not apply to students performing work that is not related to their course, such as to help finance their studies or during a gap year
- people undertaking work experience for you who are of compulsory school age are not entitled to the minimum wage. If someone is above compulsory school age but has stayed on in full or part-time education, they are entitled to the minimum wage unless they are undertaking a work placement with you as a required part of their studies
- participants in government schemes or programmes to provide training, work experience or temporary work, or to help in seeking or obtaining work
- participants in EU Lifelong Learning Programmes (Leonardo da Vinci, European Community Youth in Action, Erasmus or Comenius)
- voluntary workers in your organisation are exempt from the minimum wage if both the following apply:
- you are a charity, voluntary organisation, associated fund-raising body or statutory body
- you give them no monetary payments and only limited and specified expenses and benefits
Not every worker who works for a charity, voluntary organisation, associated fund-raising body or statutory body is automatically a voluntary worker.
Arrangements which don’t qualify for the minimum wage
Someone who is doing a placement that does not involve any work being performed, such as work shadowing, will not come within the National Minimum Wage legislation. They are only observing and are not performing work.
People who are doing a placement on a volunteer basis are not workers for minimum wage purposes.
In general a volunteer is someone who:
- has an arrangement with you or your organisation which does not entitle them to a financial reward or benefit in kind for work they perform under the arrangement
- does not have to turn up for work if they don’t want to (even if you or their colleagues expect them to or they generally work to a regular pattern)
- cannot be dismissed, sued for breach of contract or have payment or reward withheld if they fail to do the work or perform the services they were providing
The intention behind the unpaid activity (whether to benefit the environment, other groups, or the individual personally) is irrelevant. Someone may volunteer to do work to gain experience or in the hope that they will get a good reference. However, a promise to provide a contract or further work that will be paid may make the individual a worker for minimum wage purposes and thereby entitle them to the minimum wage.
Volunteers may be paid back reasonable out-of-pocket expenses. Payment of such expenses will not make them a worker for minimum wage purposes.
Calling an unpaid worker ‘unpaid’ or ‘a volunteer’, even if the individual agrees to this, does not prevent them from qualifying for the minimum wage if they are entitled.
What to consider when designing work experience placements
Before advertising a vacancy on an ‘unpaid’ or ‘expenses only’ basis, you should check whether the person that you are planning to recruit will be classed as a worker for minimum wage purposes. See ‘Who gets the minimum wage’.
Adverts which suggest illegal unpaid positions inform HM Revenue and Customs’ risk assessment process, and employers who are considered to be ‘at risk’ of not paying the minimum wage may be targeted for further investigation.
Employment contracts and other written agreements
If you take someone on a work shadowing or on a volunteer basis, it is recommended that you agree elements of the arrangement in writing, such as learning objectives, and tailor their activities to these learning objectives. Documenting objectives for the work experience and recording that you will pay back ‘out of pocket’ expenses will not, in itself, amount to an employment contract or a contract to personally perform work or services which entitles the individual to the minimum wage.
Simply stating in a written agreement that a person is not a worker or that they are a volunteer does not mean that they are so for the purposes of NMWlegislation. A court or tribunal would look at the reality of the arrangements made with the individual to decide if they are entitled to the minimum wage.
Stating in documents that the minimum wage does not apply will not limit your liability to pay the minimum wage when it is due. National Minimum Wage legislation ensures an employer cannot avoid paying minimum wage in this way (even if the person concerned agrees to this).
Record keeping and health and safety
If you take someone on as a worker, the usual rules on record keeping apply.
If you take someone on a work shadowing or volunteer basis, we strongly recommend that you document the arrangement that you have made with the person, and/or keep a record of any oral agreements in setting up the arrangements and any subsequent changes. In particular, if someone claims that they owed minimum wage arrears, you must demonstrate that they are not a worker for minimum wage purposes or that no arrears are owed.
The government encourages people who accept work experience placements or internships to keep records of what they agreed with their employer. This information may be used as evidence if their entitlement to the minimum wage is considered at a future date, such as by a tribunal or HM Revenue and Customs. Note the promise of a contract or future job may amount to a benefit in kind which makes the person a worker for minimum wage purposes.
Making someone doing work experience comply with a legal requirement, such as health and safety, is unlikely on its own to result in the person being classed as a worker and entitled to the minimum wage.
Work experience - examples
These are for illustrative purposes only. Ultimately only a court or tribunal can decide if someone is entitled to the minimum wage in a given set of circumstances.
Examples of workers who are entitled to the minimum wage
Example 1: internship with an oral agreement
Lucas takes up an internship at a newspaper business. He agrees orally with the editor that he will work personally for 4 days a week from 9am to 5pm and will undertake research activities as directed. He receives some payment for working the agreed hours.
Lucas has made an oral contract with the editor and should be paid at least the minimum wage.
A contract can be oral or implied as well as written.
Example 2: ‘unpaid intern’ with a promise of paid work
Amanda applies for a position at a record company. She is told that for 3 months she will be paid ‘expenses only’ and is referred to as an ‘unpaid intern’. However, as part of her agreement with the company, it is promised that at the end of her ‘internship’ she will be taken ‘on the books’ and paid above the minimum wage.
Amanda should be paid at least the minimum wage for the whole time she spends at the record company.
Whether someone is a worker does not depend on what job title they are given. For example, calling someone an ‘unpaid intern’ or ‘volunteer’ does not prevent them from qualifying for the minimum wage if they are really a worker. The promise of paid work is a form of reward for work undertaken.
Example 3: work experience with a financial reward
David successfully applies for a work experience position in a small graphic design company, after seeing an advert offering £50 ‘travel expenses’ for each week. He receives these ‘travel expenses’ despite walking to work.
David should be paid at least the minimum wage.
Paying a financial reward which is more than paying back genuine ‘out-of-pocket’ expenses is evidence that David is a worker for minimum wage purposes.
Example 4: signed agreement to ‘unpaid’ work with a reward
Ben takes up an acting role in a short film. He signs a form agreeing to work unpaid. However he is promised a small percentage of any future profits, a DVD copy of the film and tickets to the company’s releases for the rest of the year, but no salary.
Ben should be paid at least the minimum wage.
An individual cannot sign away their rights to the minimum wage. Entitlement to the minimum wage depends on whether they are a worker. Ben isn’t a volunteer because he will get a reward for the work he does - the fact that no cash changes hands is irrelevant as benefits in kind that have a monetary value count as a reward.
Examples of workers who are not entitled to the minimum wage
These workers are covered by a specific exemption in National Minimum Wage legislation.
Example 5: work experience of less than a year as part of a course
Katerina is studying at teacher training college to become a primary school teacher. She spends 2 periods of 8 weeks working in local primary schools as part of her course.
Katerina does not need to be paid the minimum wage because the work is a required part of her course and the placement at the primary school does not exceed 1 year.
Students doing work experience as a required part of a UK-based further or higher education course are workers who are exempt from the minimum wage, as long as the total time of their placement does not exceed 1 year.
However, in the evenings, Katerina works in a local restaurant to fund her studies. Katerina should be paid at least the minimum wage for her work in the restaurant. The exemption does not cover students doing work that is not part of their course.
Example 6: voluntary worker at a charity with a contract for paid expenses
Donna takes up an internship as a charity’s events organiser. She has a contract in which she has agreed to organise certain events for the charity and attend on particular days and times – she is not paid, but travel and lunch expenses are paid back.
Donna does not need to be paid the minimum wage because she is a voluntary worker.
Voluntary workers are workers who are specifically exempt from the minimum wage under National Minimum Wage legislation. To be exempt, they must work for a charity, voluntary organisation, associated fund raising body or statutory body and receive no monetary payments and only limited and specified expenses and benefits.
Examples of individuals who are not workers and are therefore not entitled to the minimum wage
Example 7: work shadowing
Sayeed, a university student, arranges 2 weeks’ work shadowing at a local company. This is unrelated to his studies. At the company, Sayeed shadows team members in different parts of the organisation and learns about the company. His activities are limited to observing, listening and questioning. He does not receive any payments, but can claim travel expenses.
Sayeed does not need to be paid the minimum wage because he is not a worker for minimum wage purposes.
Individuals taking part in work shadowing are not performing work.
Example 8: volunteering with no contract
Ryan volunteers at a museum. He has no contract with the museum. He has a regular pattern of working on Tuesdays and Thursdays 9am to 6pm. He is not obliged to turn up for work, but is asked to let the museum’s manager know if he is unable to come on his usual days. He is welcomed back after periods away. His role usually involves administrative tasks (answering the phones and taking notes of meetings in a set format), but can change from day to day, with details set out by a manager each morning. He is unpaid but receives travel and lunch expenses for the days he works.
Ryan does not need to be paid the minimum wage as he is a volunteer.
Others expecting you to turn up or generally working a regular pattern does not necessarily indicate you are a worker, unless the employer can require you to work or impose sanctions for failure to do work. An individual can be a volunteer even if they are working under the supervision or control of a manager or having to meet specific standards or guidelines.