Businesses advertising paid internships for young people are being warned they must pay the minimum wage or face litigation.
Around 200 firms that have recently offered paid internships have been told by HM Revenue and Customs (HMRC) they may be visited by an inspector. The taxman has sent out letters warning that it intends to carry out targeted checks to ensure young people are being properly paid.
The Government is currently trying to clarify employment law around the use of interns amid allegations by unions that big companies are simply using the system as a source of cheap or unpaid labour.
Employment Relations Minister Jo Swinson told the BBC: “Not paying the national minimum wage is illegal and if an employer breaks the law, government will take tough action. Anyone considered a worker under the law should be paid at least the minimum wage, whether they are an intern, or someone on work experience.”
HMRC investigations found 736 employers did not pay staff their full entitlement or used interns to work for free last year. According to unions, the figure is much higher. The TUC estimates that around 250,000 people are not getting the minimum wage and the Unite union reckons around a third of Britain’s 50 biggest charities use unpaid interns.
Under-18s are entitled to £3.72 an hour, increasing to £6.31 for people aged 21 and over under the terms of the national minimum wage.