A survey of more than 2600 graduates and 1000 business leaders has revealed that 27% of graduates have taken an unpaid internship but that this number is nearly tripled when it comes to retail (89%), the arts (86%) and the media (83%).

Carried out by the Sutton Trust, Pay as You Go? (which can be found at www.suttontrust.com) aims to provide a comprehensive examination of graduate internships, including analysis of pay, access and quality.

Almost half (46%) of employers report offering internships, with large employers twice as likely to offer them as small businesses.

Of those who do, almost half report offering unpaid placements (48%). Just over a quarter (27%) pay expenses only while 12% offer neither pay nor expenses. Over half of unpaid internships were over four weeks in length and 11% lasted more than six months.

According to the Sutton Trust, middle class graduates were more likely to be funded by parents, have savings and use personal connections to obtain internships. Those from working-class backgrounds were more likely to work a paid job to subsidise their internship and obtained them through an educational institution.

“When provided with a series of scenarios,” the Trust said, “around a third of employers didn’t know whether the situation would be legal or not, and up to 50% incorrectly thought a scenario where an intern was being paid under the National Minimum Wage (NMW) was legal.”

It includes a series of recommendations for Government action but also notes that 31% of staffers working for MPs and Peers in Westminster had worked unpaid (36% of those working for Labour offices and 28% of those working for Conservatives).

Change for the better

The Trust argues that the Government should ensure that:

  • all internships longer than four weeks should be paid at least the NMW

  • HM Revenue & Customs (HMRC) should extend its information campaign on internships and the NMW to all employers and work to inform young people of their rights.

It also wants employers to:

  • advertise internship positions publicly (and not fill them informally)

  • improve the quality of training offered in their internships

  • provide a designated workplace mentor/supervisor

  • pay interns at least the NMW even if legislation to that end is not introduced.

Comment by Croner Pay and Reward Manager Clare Parkinson

The survey results found a worrying number of employers did not understand how pay laws relate to the use of interns.

While internships are a traditional method of providing insight and experience into professions, using these as a source of unpaid or low paid work may break the law.

Those who are carrying out work during the internship are likely to be classed as a “worker” within pay laws, meaning they should receive an average hourly pay that is at least the minimum wage rate applicable to their age.

Those who offer paid internships may also experience a greater talent pool to choose their intern from, as well as improve their intern’s engagement and productivity within the role.

Last reviewed 3 December 2018