Internships are sometimes called work placements or work experience and require an intern to carry out some form of work during that period. There are different types of interns depending on the nature of the work and conditions. It is important to understand the legal implications of each type of intern as it will impact the employer’s obligations. Moreover, it is important to correctly classify the intern from the start as a misclassification of the work can create liability for the employer. This guidance note explains the different types of interns, their respective implications and how to choose the appropriate internship agreement.
What are the different types of interns?
An internship can be paid or unpaid although there are legal implications about whether an intern is considered a volunteer, worker or an employee. The rights an intern has depends on their employment status. Various factors are considered when working out the employment status of an intern which include:
- If an intern is providing work which conveys an economic benefit as opposed to working for their own benefit (i.e. work shadowing to understand departmental differences) the intern is more likely to be considered a worker.
- If the internship continues for an extended period of time, the intern is more likely to benefit from worker rights. Although it is important to note the duration and title of the internship alone will not determine the employment status. A worker intern may work at an organisation for a prolonged period of time but not acquire employee status.
- If an intern is free to come and go as needed, the intern is less likely to be considered a worker. On the other hand, where an intern is required to work specific hours over a specified period of days/weeks with assigned tasks, the intern is more likely to be considered a worker.
It is clear the employment status of an intern can not automatically be determined by way of an agreement or label. It depends on the nature of the internship and the rights and benefits one is entitled to during the internship. Below there is a brief description of each in order to better understand the differences between an intern volunteer and an intern worker.
When is an intern a Volunteer?
A volunteer may be an individual who is working for a charitable organisation, associated fundraising organisation or a statutory body. In addition, if an individual does not get paid aside from reasonable travel or lunch expenses, they are more likely to be considered a volunteer. A volunteer will not fall under the definition of a worker if there is no form of contract of employment or a contract to provide work/services and receives no remuneration or benefit in kind in return for the work/services.
When is an intern a Worker?
Where an intern carries out work which conveys an economic benefit to the employer, he/she is more likely to be considered a worker as opposed to someone who is doing it for his/her own benefit. Most workers have either a contract of employment or a contract to provide services. However, even if the intern does not have an employment contract, the intern may still be considered a worker depending on what happens in practice whilst working. Workers benefit from basic employment rights but not as extensive as the rights employees are entitled to.
An intern is classed as a worker if they are promised future work and meet the following requirements and are entitled to:
- national minimum wage
- protection from unlawful deductions
- statutory minimum level of paid holiday
- statutory minimum rest breaks
- not work more than 48 hours/or opt out
- protection from unlawful discrimination
- protection from whistleblowing
- not be treated less favourably if they work part time.
In addition to the following requirements an intern is more likely to be considered a worker where:
- occasionally do work for a specific business
- they only work when they want to and don't have to accept it
- the arrangement is casual, free lance, zero hours or as required
- there is an agreement (oral or in writing)
- there is manager supervision
- they can't send someone else to do their work
- the business deducts tax and National Insurance contributions
- the business provides tools or equipment for work
Who is not an intern?
Employees are not interns
Employees have additional employment rights which do not apply to intern workers. An individual is more likely to be an employee where:
- they are required to work regular hours unless on leave (holiday, sick leave or maternity)
- minimum hours must be worked to be paid
- they may have a manager or supervisor who monitors their workload and is responsible for assigning deadlines
- they cannot assign their work to others
- they are entitled to holiday
- they are entitled to join the pension scheme available to them
- the disciplinary and grievance procedures apply to them
- the contract highlights their redundancy procedure
- their employment agreement uses the terms employer and employee
Employees are entitled to the same benefits as a worker in addition to:
- Statutory Sick Pay
- Maternity/Paternity Leave
- Minimum notice period if employment is terminated (for example dismissal)
- Protection against unfair dismissal
- Right to request flexible working
- Emergency leave
- Statutory Redundancy Pay
Although employees are entitled to these benefits, some may require continuous employment for a specific period of time in order to activate access to these benefits.
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What are the legal implications for each type of intern?
When do employers have to pay their interns?
It is clear employers must pay their workers at least the National Minimum Wage and whether an intern is legally defined as a worker depends on the internship itself rather than any title given.
Interns must be paid where:
- There is a contract outlining the parameters of their work (oral or written agreement)
- There is work for the intern to do
- The intern must turn up for work
- The intern is promised future work
Interns do not need to be paid where:
- The intern is completing an internship as part of a UK-based higher education course which is less than 1 year in duration
- The intern is working for a charitable organisation, associated fundraising organisation or a statutory body and is paid only for expenses for food and travel
- The intern is work shadowing and not carrying out any work
Organisations who fail to pay the National Minimum Wage to interns who are considered workers and are entitled to National Minimum Wage are serious and may be required to pay up to six years of backdated pay alongside potential liability for criminal penalties where there has been wilful neglect to pay the National Minimum Wage.
Will the intern be considered an employee?
An intern may be considered an employee where:
- An agreement exists where the individual provides work or skill in the performance of services for the employer in return for a wage or remuneration, otherwise known as mutuality of obligation.
Example:
Murray v Newham Citizens Advice Bureau UKEAT/1096/99 Mr Murray claimed disability discrimination against Newham Citizens advice Bureau (CAB). The Employment Appeal Tribunal held that the volunteer agreement in which Mr Murray agreed to volunteer had specific times and for a minimum period of time, the CAB also agreed to repay his expenses and provide basic training. It was held that this amounted to a binding contract and Mr Murray was found to have been employed under a contract of employment. This case highlights the importance of defining the relationship early and having parameters in place to avoid situations arising where an intern is misconstrued as an employee.
How to hire an intern?
An internship agreement will be necessary to hire an intern. It is recommended to prepare an agreement even if little work will be performed as it helps set expectations, responsibilities, rights and restrictions. Before creating the internship agreement, it is important to have determined if the intern will be a volunteer, worker or if they should in fact be treated as an employee.
What are the key aspects of an internship agreement?
An internship agreement template should include the following clauses:
- Intellectual Property
- Confidential information
- Data Protection
- Remuneration (Unpaid or paid internship)
- Duration of the internship (start date, end date and hours of work)
- Place of work
Not using an internship agreement can create unnecessary risks for your business, even if you are proposing an unpaid internship. To create a lawyer-approved internship contract on no legal budget, tailor a Legislate contract template for only £9.95.
How to find an intern?
Most universities have a careers or internship office which can be a great source for interns if the nature of the internship work can be performed by a student. Whilst students will have academic commitments towards their University, they should still be able to do internships during their holidays or term if their course requires the completion of an internship. Classified ads in local newspapers or online job boards such as LinkedIn are also a great way to advertise your internship position to a broader audience.
How to prepare your workplace for an intern?
For any intern you expect to hire, it is important to have a plan to provide structure to their internship. The plan should include the tasks they will be expected to complete with associated timeframes. Even if an intern is simply shadowing team members, a plan will help provide context for the work they will be exposed to. To help interns with their training, consider using the Studocu platform, which allows you to choose tasks from their Universities.
Preparing a formal onboarding is also a great opportunity to introduce interns to your company and team as well as internal policies and procedures. It is also important to present your company’s health and safety policy, especially if the internship is in person and at your office. Finally, when preparing your workplace for the internship, you should be considerate of the fact that it might be your intern’s first work experience.
To give a great first impression to your intern, consider creating your internship agreement with Legislate. Your intern will be able to access their agreement before, during and after the internship and more importantly will be able to understand their legal rights and obligations. To get started, register your account, read our internship agreement tutorial or book a demo to speak with us!
About Legislate
Legislate is an early stage legal technology startup which allows large landlords, letting agents and small businesses to easily create, sign and manage contracts that are prudent and fair. Legislate’s platform is built on its patented knowledge graph which streamlines the contracting process and aggregates contract statistics to quickly unlock valuable insights. Legislate’s team marries technical and legal expertise to create a painless, smart contracting experience for its users. Legislate is backed by Parkwalk Advisors, Perivoli Innovations and angel investors.
The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.