Most employers support a crackdown on unpaid or underpaid internships as new research suggests a growing class divide in accessing schemes.
A study by social mobility charity the Sutton Trust has found nearly two in five (38%) think unpaid schemes should be banned, while 30% want better enforcement of existing minimum wage legislation.
Nearly half of organisations say they pay interns at least the minimum wage, while the proportion offering schemes paid below this rate has grown to 17%, from 11% in 2018. The percentage of employers offering unpaid internships has also increased slightly in this period to 9%.
However, according to three in four firms with internships in place, a ban on unpaid schemes would not affect the number of opportunities they offer and only 8% believe they would need to substantially cut the schemes provided.
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Nick Harrison, chief executive of the Sutton Trust, said: “Internships are an increasingly critical route into the best jobs, and it’s shocking that in this day and age, many employers still pay interns below the minimum wage, or worse, nothing at all. They should be ashamed.”
A class divide
The research also highlighted an increasing gap between working-class and middle-class graduates in accessing vital internship routes into careers.
The Sutton Trust believes this is a result of employers either giving places to friends and family rather than advertising roles or continuing to underpay interns at a time when tighter controls on illegal practices in this area are expected to be announced by the government.
A poll carried out by Public First for the Sutton Trust showed that 51% of graduates have undertaken an internship, a growth of 12 percentage points since 2018, while 27% have participated in multiple internships. Those in London were much more likely to have taken part in an internship than graduates in the West Midlands, Yorkshire, Scotland and Wales.
Meanwhile, a survey conducted by YouGov for the Sutton Trust of employer HR decision-makers found that 59% currently offer internships, compared to 48% in 2018, with one in three graduates believing they had only been able to attain their current role because of the internship.
However, the findings suggest a widening of the gap between working-class and middle-class graduates in accessing internships since 2018, increasing from 12 to 20 percentage points, with 36% of working-class graduates completing an internship compared to 55% of middle-class individuals.
Lack of enforcement
Under employment legislation, if they are classified as ‘workers’, interns are entitled to the national minimum wage (NMW), as well as other entitlements. But, according to the Sutton Trust, some businesses are getting away with breaking the law because of confusion and a lack of enforcement. It claims most existing unpaid or underpaid schemes are most likely illegal, but interns themselves are expected to report employers that are not paying up.
The survey showed 61% of recent graduate internships were unpaid or underpaid, with 23% paid below the minimum wage. Around one in six (17%) schemes offered expenses only and a similar proportion (21%) provided no compensation at all.
The results revealed that middle-class graduates are more likely than working-class ones to have undertaken an unpaid or underpaid internship, at 37% versus 28%. Graduates who completed unpaid schemes were able to do so because of funding from parents (40%), they had free accommodation with family or friends (39%) or used their savings (29%).
Harrison said: “The government has pledged to ban unpaid internships, which is absolutely the right thing to do. Clearly not all young people can get support from the bank of mum and dad so banning this outdated practice will help to level the playing field for these valuable opportunities. It’s a no-brainer and should be implemented without delay.”
The data also indicated that most internships are not openly advertised to all, with one in five (20%) finding placements through friends and family at organisations compared to 11% through advertisements.
Harrison added: “As well as paying interns properly, there’s also a whole lot more that employers must do to make sure they’re accessing a wider pool of talent, such as advertising internship opportunities rather than taking in family and friends of their existing staff or biggest customers.”
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