Peer calls for crackdown on unpaid internships

Fears some employers are exploiting loopholes in the law

A member of the House of Lords has suggested that the Government should take steps to ban unpaid internships that go on for longer than four weeks.

Chris Holmes, a Conservative Peer, said that he believes the law should be updated because of concerns that current legislation is being exploited by some employers.

Lord Holmes of Richmond recently brought forward a Private Member’s Bill setting out suggestions for bringing in tighter controls.

This is now scheduled for a Second Reading and while it is unlikely to progress without the backing of ministers, the Peer has stepped up his calls for the Government to address the issue.

Speaking to The Guardian this month, he said that he would like HM Revenue & Customs (HMRC) to investigate the issue more thoroughly.

“There are adverts for unpaid internships that HMRC could follow up,” he said. “They could get into dialogue with that business or employer or organisation.”

“In the light of lower rates of reporting and the lower rates – if any – of actual prosecutions, isn’t it clear that the law is not working? We need further work from HMRC.”

The tax authority is tasked with investigating companies who fail to adhere to minimum wage legislation. The problem is that there is often ambiguity as to whether or not an intern is classed as “a worker”, which is a prerequisite for being entitled to the statutory minimum.

An investigation by the newspaper found that of the internships advertised on certain websites, a third were unpaid or offered expenses only.

Concern has been growing that this type of placement is becoming endemic in certain sectors, such as fashion and the media – with many young people agreeing to work for weeks or even months without pay in order to gain a foothold in especially competitive industries.

Critics say that this is having a knock-on effect on social mobility, as often it is only better-off applicants – whose parents are able to subsidise their income – that could accept this type of arrangement.

The Government itself has been reluctant to impose a change in the law, amid fears it could undermine existing employment laws. Although research earlier this year suggested that a majority of the public would favour a ban on unpaid placements.