Internships FAQ: A guide for employers

Are you an employer who is considering taking on an unpaid intern? There are a number of challenges for employers to ensure that the individual being hired is not classified as an employee or a worker who is entitled to several employment law rights, including remuneration or paid holiday.
Q: What is an internship?
A: An internship is a period of work experience offered by an employer to an individual in order to provide them with experience within the work environment of a specific field. Depending on the nature of the role in question, this experience can be hands-on, or it may be more of an observational role.
The internship opportunity is usually for a limited number of weeks or months. These roles are often taken up by students who have recently graduated or students who are still studying and are looking for experience during the winter or summer break.
Q: What are the benefits for companies?
A: Internships provide an opportunity for companies to discover new talent and find potential future employees. According to an article published by the Guardian, more than 60% of Deloitte’s undergraduate interns are recruited for graduate roles. By recruiting interns, companies have an opportunity to determine how well the individual fits into the business before hiring them on a permanent basis.
By recruiting interns, the workload of the current crop of employees and workers will lessen, as the workforce is increased and tedious tasks can be passed on to interns at little to no cost. This is likely to have the knock on effect of easing tension and relieving stress in the workplace.
Internships also allow existing employees to practice and utilise their management skills. This is particularly useful experience for those employees looking for a senior role in the organisation as they can manage and mentor interns, demonstrating their skill set.
Q: I have heard a lot about employment status – employees and workers. Does an intern fall into either of these categories?
A: Companies looking to start an unpaid internship program must be wary of the employment status of their interns. If the intern is classified as an employee or a worker under employment law, they will be entitled to certain employment rights against the organisation. For example, a worker is entitled to National Minimum Wage.
Therefore, if an employer is looking to start an unpaid internship, it is imperative they take steps to prevent the individual from obtaining either of these employment status’. Arguably the best method to avoid any confusion is for the company to provide the intern with an agreement which clearly outlines the relationship between both parties.
Q: Can I pay the intern expenses?
A: The company should avoid making payment to interns which may be mis-construed as wages. Expenses should be clearly marked and reimbursed against receipts. In no circumstances should regular payments labelled as ‘expenses’ be paid to the intern, as this is likely to label them as a ‘worker’.
Q: Can I pay the intern sick pay or holiday pay?
A: For an unpaid internship, the intern will not be entitled to holiday pay or sick pay as they do not hold the same employment status as an employee or worker.
Q: Can I pay the intern a salary?
A: If you pay the intern a salary, this would be classed as a paid internship which is outside the scope of this FAQ. If you require further details on a paid internship, please contact us to discuss your options.
Q: I am concerned about GDPR – do I have any privacy obligations in relation to the intern?
A: Despite not being classified as an employee or a worker, any intern will still require their data to be protected in line with the General Data Protection Regulation (EU) (GDPR). A breach of the GDPR may result in fines and penalties being incurred by the company.
Q: How do I recruit an intern?
A: Companies should also be aware they may be liable for acts of discrimination or harassment carried out by the intern. Therefore, it is crucial the company conducts a proper recruitment process for any interns they decide to hire, similar to the recruitment process for an employee or worker.
Q: Should I provide the intern with a job description?
A: We do not believe this is necessary for an intern. In fact, it is best practice to allow the intern to have flexibility, allowing them to decide when they work and what work they complete (to a certain extent!). This will prevent the intern from gaining employee or worker status.
Q: Does the intern need a contract?
A: It is not essential for the intern to have a contract, but we believe having a contract is a useful tool to ensure the employment status of the individual is not mis-interpreted.

At Kalra Legal Group, we offer a drafting service where we prepare this agreement on your behalf for a fixed fee of £250 plus VAT.

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For further advice on internships or any other employment matter, contact our team of specialist employment lawyers today on 0330 221 0684 or via our online enquiry form to arrange a free 15 minute telephone consultation.
Disclaimer: The above information should not be taken as legal advice. For legal advice on your business’s employment law matters please contact a member of our team directly.