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Employment minister Jo Swinson has referred 100 employers accused of flouting national minimum wage legislation - by hiring "free interns" - to HM Revenue & Customs (HMRC).
Campaign group Intern Aware, which described unpaid internships as "exploitative, exclusive and often illegal", sent Swinson a list of 100 organisations that have been advertising unpaid internships. Under the National Minimum Wage Act 1998, workers are required to be paid the national minimum wage, currently £6.19 per hour.
Swinson replied in a letter to Intern Aware last week: "The list of employers that you provided will be treated as intelligence by HMRC. Intelligence forms part of the risk process by helping to identify sectors where there is a higher likelihood of non-compliance."
She told the BBC: "There is a significant problem in society where people are being exploited for no money when they should be being paid.
"We have got to change attitudes and make sure companies realise it is not appropriate. Where there is a job that needs doing, then it needs to be treated as a job and not be done be someone who is not being paid. This attacks the national minimum wage."
A spokesman for the Department for Business, Innovation and Skills said: "The law on the national minimum wage is clear. If somebody on a work experience placement or internship is a worker under national minimum wage legislation, then they are entitled to the minimum wage.
"Internships can be a valuable way of helping young people get into work and realise their ambitions. Anyone who feels that they are being exploited should contact the Pay and Work Rights Helpline. Their call will be fast-tracked to HMRC, which actively investigate any claims of national minimum wage abuse."
Marie van der Zyl, head of employment at law firm Davenport Lyons, said it had had an increasing number of enquiries from our company clients who are worried that they are no longer able to offer work experience placements, for fear of being investigated by HMRC. "There is a lack of guidance from the Government as to what they consider to be ‘genuine’ work experience placements, which would not attract a right to payment, and when a company might cross the line," she said.
A spokesman for HMRC said that it did not comment on individual investigations.
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