21 March 2019 - Article
February 2018, the Government released its response to the Taylor Report on working practices (see: www.bbc.co.uk/news/business-42997400). One area that has been increasingly in the news recently and which was again in the spotlight was the issue of unpaid internships. Whilst internships and work experience placements can be a great way of getting experience in an industry, when the intern is in fact working for the host company, they are entitled to the national minimum wage. Not paying at least the national minimum wage for these roles means they are effectively inaccessible to those without other sources of income and act as a barrier to entry to certain industries. The effect on social mobility in sectors where unpaid internships are prevalent has long been criticised.
I have previously written about internships and when an individual is really a worker or a volunteer – a particular issue to the sports sector where volunteers are regularly and legitimately used. (see here)
Now the Government is stepping up its enforcement effort by asking HMRC to investigate over 500 employers, now is a good time to look again at what unpaid roles are offered by sports employers and if they are true volunteer roles or if there is a risk that the individual could be a worker.
There are also a number of calls to strengthen the law to prohibit unpaid internships of a month or more in duration. This will certainly help make it clear that the longer internships offered of 3 or 6 months, or even longer are not appropriate. However, if this change in the law is made, this does not mean that any internship lasting less a month is in the clear – the underlying law and test of whether someone is a worker or not will still apply. There is therefore a risk that this change would create a false sense of security and mean that employers do not engage fully with the underlying test – this would be risky.
We wait to see the outcome of the consultations that have been released in response to the Taylor Report and to see the concrete legislation put forward in response to the Government proposals. In the meantime, sports businesses will want to take steps to make sure they are, and remain, compliant with the existing law.