New Sutton Trust research finds confusion around the law on interns

By agency reporter
November 28, 2018

Over a quarter of graduates surveyed (27 per cent) have taken on an unpaid internship, with many having to rely on parents, friends and second jobs to get by, according to new research from the Sutton Trust.

Pay As You Go, based on YouGov surveys of graduates and employers commissioned by the Sutton Trust, gives a detailed view, for the first time, of the types of internships that graduates are completing in their first few years in the job market.

The research finds that graduate internships appear to be on the rise, with 46 per cent of 21-23 year olds having done one, compared to 37 per cent of 27-29 year olds. Younger graduates are also more likely to have taken on more than one internship. According to the report, there are around 100,000 interns working in Britain every year, with around 58,000 unpaid.

In many top professions, internships are seen as a requirement before a first job. But previous research by the Sutton Trust found that an unpaid internship now costs a single person living in London a minimum of £1,100 per month. The significant costs associated with unpaid internships are shutting many less advantaged young people out of careers. In prestigious industries such as media and the arts (including fashion, theatre and tv), up to 86 per cent of internships on offer are unpaid.

The report takes an in-depth look at internships in politics and finds that 31 per cent of staff working in the offices of MPs and Peers in Westminster had completed unpaid work, including 36 per cent of Labour staffers and 28 per cent of Conservatives. Just half of staffers (51 per cent) had found their current job through an advertisement, with over a quarter (26 per cent) gaining it through personal connections.

According to today’s research, a large proportion (43 per cent) of unpaid interns rely on living for free with family and friends to get by. Just over a quarter (26  per cent) relied on money from their parents while a similar number (27 per cent) had to work another paid job in order to fund their internship.

The report also finds that both graduates and employers are confused about the current law on unpaid internships. Under national minimum wage legislation, interns must be paid if they are expected to work set hours or on set tasks. Up to 50 per cent of employers and 37 per cent of graduates surveyed were not aware most such unpaid internships are likely to be illegal.

While doing an internship is associated with higher salaries, there is some evidence that doing multiple unpaid internships may actually have a negative impact on employment and wages. This suggests that many young people in certain industries are being trapped in cycles of unpaid placements without significant benefits to their career. Many internships offer little in the way of training, and are instead focused on completing necessary work for their employer. Seventy per cent of employers say that interns do useful work for their business.

Pay As You Go was published on the same day as a bill to ban unpaid internships over four weeks in length was brought to the House of Commons. The bill was originated in the House of Lords by Conservative peer Lord Holmes of Richmond and is sponsored in the Commons by Alec Shelbrooke MP.

The Sutton Trust is backing Lord Holmes’ bill and would like to see all internships longer than one month to be paid at least the National Minimum Wage of £7.05 for 21-24 year olds, and ideally the Living Wage of £9 per hour (£10.55 in London).

In addition, the report recommends that internship positions should be advertised publicly, rather than filled informally and recruitment processes should be fair, transparent and based on merit.

Sir Peter Lampl, founder of the Sutton Trust and chairman of the Education Endowment Foundation, said: “Unpaid internships prevent young people from low and moderate-income backgrounds from accessing careers in some of the most desirable sectors such as journalism, fashion, the arts and law. This is a huge social mobility issue.  It prevents these young people from getting a foot on the ladder.

“In order to help tackle this situation, internships should be advertised, not offered through informal networks.  This locks out the many young people who don’t have connections.

“The legal grey area around internships allows employers to offer unpaid internships with impunity. That is why the law should be changed.  We are advocating that all internships over four weeks should be required to pay at least the National Minimum Wage and preferably the Living Wage.”

In an open letter, Lord Holmes of Richmond has called on the government to end the scandal of unpaid internships. He writes: “One of the most pernicious ways in which the advantages of the fortunate few are entrenched is through the illegal yet widespread practice of unpaid internships. Inevitably and obviously only those who can afford to work free are able to access these opportunities which in turn lead to paid jobs and ultimately careers in areas such as journalism, fashion and, most shockingly, politics.

“The government have said they are taking the problem seriously, yet in the past nine years HMRC has recorded no prosecutions in relation to interns and the National Minimum Wage. It is unsurprising that individuals are reluctant to report companies or employers. If you believe this practice to be an unpleasant but necessary way of getting a foot in the door you are unlikely to do anything that would slam the door shut completely. For countless others it is yet another way of ensuring so many doors remain closed.”

* Read the report Pay As You Go here

* The Sutton Trust https://www.suttontrust.com/

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