HR · 4 October 2016

Hiring an intern: Everything a small business owner needs to know

If you do not intend to pay an intern the National Minimum Wage, you should ensure that they have no personal responsibility within the business
Recruitment expert Margaret Keanelooks at what abusiness owner must consider beforebringing anintern into a working environment.

Experience is what counts when employers make decisions about who to employ. This can sometimes result in a chicken and egg? situation, because you need a job in the first place to gain experience!

One way of getting around this is for students, graduates, or indeed anyone else, to complete a period of work experience to try to give themselves a competitive advantage for themselves over others. This is where an internship can prove beneficial. The intern is therefore the person who carries out an internship, which is a period of work experience and training offered by an employer to give the individual exposure to the working environment relating to the candidate’s field of study, or the direction they want their career to go in.

Internships can vary in length and the duration is usually agreed by both parties prior to commencement. They can also be paid or unpaid depending on whether the individual is a worker or not.

In some instances, hiring an intern means an employer can assess the intern’s suitability for possible permanent paid employment, although this is not the case for all internships.

Internships originated in the US, where employment status rights are minimal in comparison to ours.

Understand your legal obligations before hiring an intern

The National Minimum Wage Act in the UK states that workers are entitled to be paid the National Minimum Wage (NMW), provided that they have reached minimum school leaving age and work, or ordinarily work, in the UK. Therefore, assuming the intern meets these criteria, the requirement to pay the intern will depend on whether the intern is a worker? or not.

A worker includes any person who works under a contract of employment or any other contract, whether express or implied, and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.

So, under an agreement with the business where the intern is contractually obliged to perform work for it personally, the definition is likely to be satisfied and they will be entitled to the NMW. Likewise, a placement that may lead to an offer of permanent, paid work could result in the intern being deemed to be a worker, because the promise of paid work is a benefit for the work undertaken by the intern.

A worker is also entitled to a number of other employment rights not just the NMW. However, if the intern is only voluntarily observing or shadowing another employee in order to gain experience of the working environment, without actually undertaking any work themselves (performing very basic tasks under supervision should still be acceptable), they are unlikely to be classified as a worker and therefore will not be entitled to the NMW.

An employment tribunal will look at the work or duties that you give the intern and whether or not the intern has a contractual obligation to personally perform them. If you do not intend to pay an intern the NMW, you should ensure that they have no personal responsibility within the business, are not required to deal directly with clients or customers, and are placed under no obligation to perform any work or tasks on an unsupervised basis. You should also ensure you do not deal with them in the same way as you would your other staff. As soon as an internship tips over the line of obliging the individual to perform particular activities during set hours of attendance in accordance with your instructions, they risk being deemed to be a worker and entitled to the NMW.



Margaret Keane is the managing director of Outsourcing HR, an HR consultancy that helps businesses succeed by providing practical, cost-effective human resources management and recruitment services. In addition to being an experienced HR professional, Margaret has a successful track record in general management roles. As a result, Margaret is focused on ensuring that HR contributes to the bottom line.