Many companies are enthusiastic about creating opportunities for younger people to gain business experience and skills in shorter placements, often labeling these as work experience or internships.
While larger businesses frequently put internship schemes in place, many smaller businesses can be put off offering these opportunities because they view them as an extra administrative burden.
Many small business owners hold the misconception that they would take up large amounts of time, money and effort but this is not always the case. In fact, providing such opportunities can bring tangible benefits for smaller employers.
Here’s what every small business owner needs to know about offering work experience and internships;
An important first step for employers is to know that different rights will be awarded depending on what scheme is offered by the business.
The position of ‘work experience’ usually relates to a period of time that a person will spend with the business, during which they learn about the role, the environment and the working life.
Work experiences can differ in what they offer and, depending on whether the person actually carries out work or simply observes, this will impact on determining whether the individual is classed as a worker and entitled to National Minimum Wage (NMW) or National Living Wage (NLW).
Internships differ from work experiences in that they are usually for higher positions which require a professional qualification to undertake and are for the purpose of gaining experience to progress in to a professional career.
Interns may work under a contract of employment. Even where internships are offered “on expenses only” or as “unpaid”, the intern may still qualify as a worker for minimum wage laws and being paid only expenses will break the law.
Minimum wage laws
Individuals on work experience or internships will qualify for the NMW or NLW if they are deemed to be a worker or employee under wage laws. This will usually depend on whether the individual is carrying out actual work for the employer, rather than just watching others, and if they are promised future work.
Even if there is a written agreement in place which says that the opportunity is not eligible for minimum wage, this will not be enforceable and a failure to pay minimum rates to those who are entitled to them will break the law.
There are exceptions to this rule and employers will not have to pay minimum wage where the intern or work experience individual is:
- Only shadowing an employee and not carrying out any work, they are simply observing.
- Truly a volunteer worker who is only entitled to specific expenses and benefits and not a wage.
- On a work placement as required by a further or higher education course that does not exceed one year.
- Undertaking work experience but are below compulsory school age or are undertaking a work placement as a required part of their studies.
- Participating in a government scheme which provides training, work experience or temporary work.
The difference between being a worker or not can be hard to define and tribunals, if they have to determine the issue, will often look at the reality of the situation rather than what has been explicitly agreed.
Many employers will, therefore, deem it safer to pay minimum rates but this is not a requirement where the exclusions truly apply.
How to put in place a work experience or internship opportunity
Though these opportunities are commonly thought of as applying to the younger jobs market, older people who wish to retrain or enter a new professional career can also see these as invaluable opportunities.
Therefore, care should be taken to ensure that advertisements for the role are not discriminatory, for example, using words like youthful can be age discriminatory and the role should be advertised in all appropriate forums not just those accessible to a particular age group.
It’s always a good idea to put in place a written agreement. Where the individual is to be treated as an employee then it is obvious they need a contract of employment.
However, setting in place a written agreement containing information, such as learning objectives and whether or not expenses will be paid, will not place the individual in the position of being a worker but clarifies the objectives and matters agreed between the parties.
For many work experience positions or internships, the individual undertaking them will often be at the beginning of a career or inexperienced in the office or work environment. This may mean that they need extra time, supervision or training at the start of their experience than most employees would, even if they are just observing.
Additionally, the concepts of health and safety will often be new so time should be spent with the person doing the experience to ensure they comply with health and safety legislation.
Advantages that work experience & internships bring to the business
These learning opportunities are beneficial for the individual carrying them out because they provide an invaluable access to carry out work and training in the sectors they wish to develop a career in. However, they are also advantageous to business.
For small businesses, these schemes provide the opportunity to have a new member of the team to bring fresh ideas in, often at a lower pay level than a full time employee.
By combining a work experience scheme and reverse mentoring you can even use those gaining work experience to train your existing employees. This can be a great way to bring new skills and knowledge to your business and train staff on a budget.
These individuals are often enthusiastic to learn and providing a positive experience during the learning periods could lead to the individual wishing to undertake a long term position with the business.
This has advantages over recruiting anew because the individual would have been trained and developed by the company so will continue to work as you wish, rather than having to take additional time to adapt a new employee to your business and practice.
This guide has been written exclusively for ByteStart by Peter Done, Managing Director of Peninsula Business Services – the UK’s leading specialist Employment Law, HR and Health & Safety service.
Last updated - 18th October, 2016