Unpaid Internships Crack Down by HMRC

Tax officials are on the hunt for firms who are breaking the law by using unpaid interns. Failing to pay workers the UK minimum wage could result in some big firms being named and shamed by the tax office.

The Department for Business, Innovation and Skills is behind the crackdown that will force firms to pay out the minimum wage. According to reports, as many as 200 firms are being targeted, each of which has recently advertised unpaid intern roles. The minimum wage is now £6.31 an hour for anyone over the age of 21, so some firms are saving thousands by filling previously paid roles with interns.

HMRC’s Michelle Wyer said, “Any employer not playing by the National Minimum Wage rules needs to put things right now. Those that don’t can expect a visit from HMRC - which could result in a penalty, payment of arrears, being publicly named and shamed by BIS or a prosecution.”

High profile firms at London Fashion Week were recently targeted and two were found to not comply with the minimum wage rules. Firms are able to offer work experience which is unpaid, but if the role is for a long term and has regular duties and responsibilities, then HMRC are taking a view that the country’s employment laws are being broken.

In 2013, HMRC has already issued 466 companies with penalties for flouting the laws. After their most recent action, a further 200 could be added to that list.

The organisation Intern Aware is behind the latest HMRC action. “We are delighted to see that action is being taken. Having said that, the proof of the pudding is in the eating and we will be expecting that enforcement action generates results as regards penalties due to non-payment of minimum wage,” Gus Baker, co-director of Intern Aware, said in a statement.

With the economy in the state it’s in, we’re not surprised that firms are pushing the letter of the law to this extent, but let’s hope this practice of treating unpaid interns as fulltime employees goes away.

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