Businesses could be fined up to £5,000 by HM Revenue and Customs for failing to pay workers the national minimum wage.
HMRC has sent out letters to companies warning them of the rules surrounding unpaid internships. Since April, penalties have been given to 466 employers for not paying the minimum wage, currently at £6.31 for those aged 21 and over.
Employment minister Jo Swinson told the Guardian: “Those occasions when you have people working for months on end for free, really is problematic. We don’t want to have a system where people get exploited and companies try to help themselves to free labour … when receiving these letters I would hope that firms think very carefully about how the law [operates] for the opportunities they’re offering.”
“This is an area where we do need to have greater priority focus which is why we’ve moved resources from other parts of the department.
“Any industry which is incredibly difficult to get into and perceived as very glamorous is one where the basic laws of supply and demand mean that there will be people who are willing to work for free and that’s something some companies can ultimately be very tempted by.”
The HMRC letters states: “If you have got things wrong, but you put them right now, we will not charge you a penalty. If you wait, and we select you for a check and discover the problem, we may charge you a penalty of up to £5,000 and you may be publicly named and shamed by the Department of Business Innovation & Skills as an employer who isn’t paying.”
According to HMRC, if an intern is classed as a worker, then they’re normally due the national minimum wage. Internships are sometimes called work placements or work experience which have no legal status on their own.