Internships: don’t risk your reputation

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Staying on the right side of the law with internship schemes (Source: Getty)

The Devil Wears Prada and The Intern perhaps show the darker side of life as a low-level employee or intern in certain industries.

Somewhat surprisingly, given the negative perception of life as an intern, internship schemes have now overtaken the traditional “milkround” of final year job applications as the most common route for students to find a job after university. Many students are willing to work for free in return for gaining valuable experience.

Prone to exploitation

The tech, media and banking industries are particularly prone to exploiting temporary work experience staff and are rife with nepotism.

In fact, often the only routes into the business are through family and friends. Startups and other sectors are also recognising the value of internships, with some providing unpaid experience or expenses as opposed to paying the national minimum wage.

The benefits of hiring interns are obvious – cheap (or even free) labour and the ability to tap into new talent. But does it all sound too good to be true? If the relationship is properly managed, internships can benefit both the intern and the business. If not, there is a risk that interns could in fact become a very costly hire.

Biggest risk

One of the greatest risks is if a company treats an intern as unpaid labour. If the intern is doing anything beyond simply work shadowing and is instead performing certain tasks and doing actual work, the intern is likely to be classified as a worker and should be paid the national minimum wage.

It’s important that you keep the internship short, don’t delegate work to the intern that might make them feel obliged to do it, and make sure staff are aware that the intern is there to shadow people and learn more about the business, rather than to undertake work.

If an intern is indeed a worker, companies should take care not to treat them less favourably because of characteristics such as age, sex or disability; a disgruntled intern may be able to pursue a claim for discrimination.

If the intern has the mind to, and is certain they never want to work in that industry again, they could argue that they are entitled to paid holiday.

Perhaps even worse, employers could be at risk of committing a criminal offence if they unwittingly engage an intern who does not have the correct immigration status to enable them to work.

That wealthy son of a director who has flown in from America for a visit and undertakes an internship while here could result in the company receiving a civil penalty of up to £20,000, as well as damage to a firm’s reputation when it is exposed for employing somebody illegally.

Treat interns right

Save for the reimbursement of expenses, do not make any payment to interns that could be construed as wages, and document the arrangements in writing to avoid confusion about their status.

However, any failure to adequately pay interns who are doing more than work shadowing could result in a further fine of up to £20,000 for each intern, in addition to the wage underpayment.

There is also potential for more reputational damage as companies that breach national minimum wage legislation can be named and shamed.

Although interns could have legal recourse, the reality is that such claims are unlikely because most students want to secure a job in that business or sector and don’t want to jeopardise their prospects. Reputational risk is far more likely to be a concern.

So while internships can be valuable to both businesses and potential future employees, make sure you don’t harm your firm’s reputation by failing to treat interns correctly.