Employers should be forced to pay interns a minimum of £2.50 an hour to prevent exploitation, according to the Chartered Institute of Personnel and Development (CIPD).
The CIPD is today (28 June) calling for the introduction of a ‘training wage’ on the day that internship schemes for recently graduated students begin across the country.
With CIPD research showing that more than a third (37%) of internships are currently unpaid, its new report Internships: To Pay or Not To Pay? proposes that all interns are paid a guaranteed minimum wage.
It argues that the new training wage would help reflect the contribution that an intern is likely to make to an organisation, as well as promote social mobility through encouraging people from poorer backgrounds to apply.
The proposed training wage of £2.50 an hour – which is the current minimum rate of pay for apprentices – would be introduced under the plans, to cover all interns and apprentices regardless of their occupation or industry sector.
Any position that is advertised as an internship would automatically trigger a legal obligation on the part of the employer to pay at least the training wage throughout the entire duration of the internship, helping to reduce complexity surrounding the issue of payment for young people and also support better enforcement arrangements.
Other recommendations in the policy paper include:
A new code of best practice should be widely disseminated to employers to help improve the quality of programmes offered to young people
Consideration should be given to the working rights that interns should be entitled to – for example, sick pay
Discussions should take place regarding the possibility of having regional pay variations to reflect different living costs in certain parts of the country.
Tom Richmond, skills adviser at the CIPD, said: “The continued existence of a major loophole in the national minimum wage legislation has created a lot of confusion and concern around the issue of whether interns should be paid or not.
“We believe that the introduction of this Training Wage would reflect the contribution that interns make to their organisations, which is likely to be less than that of a fully-trained member of staff, at the same time as avoiding concerns over reductions in the number of internship opportunities that may result from all interns being paid the full minimum wage.”
The TUC has previously warned that employers are exploiting thousands of young interns by getting them to work for free.
Reacting to today’s CIPD report, TUC general secretary Brendan Barber said: “Although this proposal is well-meaning, in practice it would represent a significant watering down of the current rights for most interns. The vast majority already have the right to be paid the minimum wage in full, and the problem has been in getting employers to face up to their responsibilities. What is really needed is simply better awareness and enforcement of the existing law.”
Pam Loch, founder and managing director of employment law firm Loch Associates, said employers cannot assume that they can simply get people to work for free anymore – even by offering a possible job or training contract in the future.
“Make sure that you are fulfilling your obligations as an employer properly before you fall foul of the law,” she told Personnel Today.