Unpaid internship legality

The core issue: worker status

Whether an unpaid internship is lawful in England and Wales turns almost entirely on one question: is the intern a “worker” for the purposes of the National Minimum Wage Act 1998? The label “intern”, “work experience”, “placement”, “unpaid” or “expenses only” has no legal significance in itself. If the arrangement in substance makes the person a worker, they are legally entitled to the National Minimum Wage (or National Living Wage, depending on age), and paying nothing is unlawful. It is not lawful to avoid this by agreement, even if the intern happily signs up to work for free.

An intern is a worker if there is a contract (written, oral or implied) under which they undertake to do work personally, and the other party is not a client or customer of a business run by the intern. The key practical indicators of worker status are:

They are given real work with actual value to the organisation, rather than merely shadowing or observing.

They are required to turn up, to work set hours, and to perform tasks, so there are mutual obligations between the parties.

They are treated much like an employee, with responsibilities, deadlines and supervision.

If those features are present, the internship is almost certainly a worker arrangement and must be paid at least the minimum wage, regardless of what it is called.

When an unpaid internship is likely to be lawful

There are recognised situations where an unpaid arrangement can be lawful because the person is not a worker or an exemption applies.

Genuine work shadowing. If the person only observes others working and does no actual work of value, they are not a worker and there is no entitlement to the minimum wage.

Genuine volunteers and voluntary workers. Someone volunteering for a charity, voluntary organisation, associated fund-raising body or statutory body may fall outside minimum wage entitlement, provided they receive no more than limited, genuine expenses and no other reward or promise of future work. This exemption does not apply to volunteering for an ordinary commercial business.

Students on a required placement. A student on a higher or further education course can undertake a work placement of up to one year as part of that course without triggering minimum wage entitlement, where the placement is a required part of the course.

Work experience for people of compulsory school age. Those below school leaving age are not entitled to the minimum wage.

Certain short government or employment programme schemes may also fall outside entitlement.

When an unpaid internship is unlawful

An unpaid internship is unlawful where none of the above exemptions applies and the intern is in reality a worker. In broad terms, this is likely where:

The intern is doing productive work that the organisation would otherwise have to pay someone to do.

They are working set hours over a period of weeks or months and are expected to attend and perform.

They are contributing to the business as if they were a member of staff.

The arrangement is with a commercial business rather than a genuine charity or an educational placement.

In these circumstances, calling the role “unpaid”, “expenses only” or “voluntary”, and getting the intern to agree, does not remove the legal right to be paid. The employer must pay at least the applicable minimum wage rate for the intern’s age, and can be required to pay arrears.

The practical grey area

Many disputes concern internships that start as shadowing but drift into real work, or where the intern is told there is a job “if things go well”. A promise of future work can point towards worker status. Similarly, if an intern is required to be present and to carry out tasks with value, a court or tribunal will look at the substance of what actually happened, not the documentation. If the facts change over time, the legal position can change with them, so an initially lawful arrangement can become unlawful once the intern begins doing genuine work.

Evidence that matters

If there is a question over whether an internship should have been paid, the useful evidence includes any written internship agreement or offer, emails or messages describing the role, records of the hours actually worked, the tasks actually performed, whether the intern had set duties and deadlines, whether they were supervised and managed like staff, and whether payment or future work was promised. Contemporaneous records of hours and duties are particularly valuable because entitlement depends on what was really done.

Remedies and enforcement

An intern who should have been paid has several routes.

1. Raise it directly with the employer first, in writing, setting out that the role amounted to worker status and requesting payment of the minimum wage arrears. Many issues resolve at this stage once the legal position is spelt out.

2. Complain to HMRC, which enforces the National Minimum Wage. HMRC can investigate, require the employer to pay arrears, and impose penalties on employers who have underpaid. This route can be used confidentially and does not require the intern to bring their own claim.

3. Bring a claim in the employment tribunal for unlawful deduction from wages or unpaid minimum wage, or a claim in the civil courts for breach of contract. Employment tribunal claims are subject to strict time limits, generally three months less one day from the relevant date, and mandatory early conciliation through Acas must be started first. Because time limits are short and the calculation of the relevant date can be technical, it is important to act quickly if a tribunal claim is being considered.

Practical next steps

If you are the intern, gather the documents and records described above, work out roughly how many hours you worked and what the minimum wage arrears would be, and put your position to the organisation in writing. If that does not resolve matters, the HMRC complaint route is low cost and low risk, while an employment tribunal claim gives you direct control but carries the usual time, evidence and litigation considerations. If you are the organisation offering internships, the safe approach is to assume that anyone doing real work of value over a period is a worker and must be paid at least the minimum wage, and to reserve unpaid arrangements for genuine shadowing, genuine volunteering for qualifying bodies, or required course placements.

Key missing facts

The answer can shift depending on details that have not been given here: whether the organisation is a commercial business or a genuine charity or voluntary organisation, whether the internship was a required part of a further or higher education course, the intern’s age, whether they actually did productive work or only observed, how many hours and over what period, and whether any pay or future job was promised. If you tell me these details for the specific internship you have in mind, I can give a more precise view on whether it is lawful and what to do about it.