Unpaid internships: here to stay?

Unpaid internships are illegal so, asks Lucy Mair, why are they largely unreported – and unpunished?

When a list of 100 companies advertising illegal unpaid internships was passed to HM Revenue & Customs (HMRC) in April, it made headlines in the national press. But the news came as no shock to the many thousands of students and graduates who have worked for free in the past - or will do so this summer - in the hope of getting their foot in the door of their chosen career.

The list was compiled by Intern Aware, a national organisation campaigning for fair, paid internships. "We asked our Twitter and Facebook followers and people on our mailing list to send us the worst examples of of unpaid internships they'd seen advertised, and we got quite a response," explains co-director of Intern Aware Gus Baker.

He hopes HMRC will now contact those companies to determine whether their unpaid interns are doing real work, which puts the employers in breach of the national minimum wage law. "If that is the case, then we expect enforcement action to be taken, which can range up to criminal sanctions," says Gus.

What's the problem?

The list compiled by Intern Aware has again highlighted the prevalence of unpaid internships, which remain largely unreported by young people doing them, and go unpunished by the government despite adverts for the illegal positions being publicly posted. Why? Because thousands of hardworking students from top universities are willing to work unpaid, and they compete fiercely to do so.

The graduate jobs market has been tough since the recession hit in 2008 and the message from employers across all industries is that work experience is essential to getting a job. Last year, a third of graduate roles at the UK's top companies went to students who'd already done an internship at the same company, according to High Fliers Research. Those internships were paid, but unfortunately there aren't enough paid internships to go around.

As a result, some companies have taken advantage of students and graduates willing to work for free to get that all-important work experience on their CV, while slashing their recruitment of paid trainees. Abbie graduated recently from the University of Bournemouth and completed an unpaid internship while studying. She says: "If you come out of university and you haven't completed one of these internships and you don't have that experience on your CV, you're going to find it even more difficult to get paid work, and I think that is a real problem."

"But," says Gus, "that culture only exists because people are willing to work for free. It wouldn't exist if companies were forced to either pay people initially or recruit for training schemes like they used to."

Breaking the law

The state of the graduate jobs market may mean young people are willing to work for free, but it doesn't make it legal or socially acceptable for businesses to exploit them. Employers break the law if they use unpaid interns to fill full-time, junior positions that are subject to national minimum wage rules.

Abbie's position at a London PR firm was billed as "work experience", but she was responsible for tasks that other employees would have been paid to do. "In addition to administrative work, I was calling up journalists and writing press releases for them to mention our clients in their magazines." She also found that it became an expense to complete her internship. "I was given £50 per week to cover my expenses, but my train fares to commute to London were over £90 each week. I couldn't have continued for more than a few weeks."

The financial cost of doing an unpaid internship raises the more important issue of fairness and equal access to opportunities. Although internships are becoming an increasingly important step on the ladder to a graduate job, unpaid internships are only open to the privileged few who can afford to pay living expenses without an income. As a result, they hamper social mobility and prevent talented, hardworking students from gaining the experience they need to compete in the jobs market.

That's why MP for Salford and Eccles Hazel Blears launched the Internships Bill in the House of Commons in December 2012 to ban the advertising of unpaid internships and regulate working conditions for interns. Earlier this year, she told The Gateway: "By outlawing the advertising of these internships, the government can send a clear message that unpaid internships shut down opportunities for more people than they open up; the practice is counter-productive to social mobility; and the principle of asking people to live and work for free is not only unlawful, it is plain wrong."

The second reading of the bill was postponed in March and it's uncertain whether it will be heard in parliament again. But Gus is hopeful that campaigners can bring it to the fore. "It's crazy to have a situation where you have unpaid internships, which are flagrantly in breach of minimum wage law, that are freely advertised and nothing is done about them."

Doing it right

While exploitative, unpaid internships are particularly prevalent in the creative and media industries, fortunately the picture isn't so bleak in other popular career sectors. The phenomenon of penultimate-year students doing a summer internship as a route into their graduate career began in the US in the 1980s. The financial services industry led the way in introducing them to the UK, and now offers some of the country's best internship opportunities.

Global financial data organisation Bloomberg welcomed its first interns in 1994 and the internship programme has since grown. "We see our summer internship programme as an invaluable pipeline into our entry level roles," says Liz Wamai, Global Head of Recruitment at Bloomberg. "By offering fully paid competitive salaries and a well-rounded experience, we can attract the best talent to join our programme each summer."

According to Intern Aware, the majority of businesses follow the law and want to make sure their opportunities are open to everyone, but the government needs to begin enforcing the law against others to ensure that unpaid internships don't stick around. Gus says: "It shouldn't be up to us to compile a list of companies that are obviously breaking the law. The authorities should be going out there and proactively enforcing the law."

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