Page last updated at 06:00 GMT, Sunday, 7 March 2010

Unpaid internships 'breaking minimum wage law'

By Bob Howard
The Donal MacIntyre Show, BBC Radio 5 live

University Graduates
40 000 students who graduated last year are still seeking full-time jobs

"I've been looking for a job ever since I graduated last year. When I started, it was for paid work, but I soon realised that was unlikely, so I thought I'd have a better chance with an unpaid internship."

Like 40,000 other students who graduated from university last summer, Craig is still trying to land his first full-time job.

As a stop-gap, he is working for free for a marketing company.

"It's something you need to do at the moment to get experience," he says.

The government is eager for others to follow in Craig's footsteps and sees internships as a means for new graduates to earn valuable vocational experience.

Eighteen months ago, the Department for Business Innovation and Skills set up the Graduate Talent Pool, a website for England that is currently advertising just under 9,000 intern vacancies.

However, approximately a third of these posts offer only expenses, even though they can last for six months or longer.

It's very difficult. I'm also working part-time to support myself. I've got enough money for this month but after that I'm going to have to leave my internship
Craig, graduate intern

There are concerns that many graduates from less well-off backgrounds, as well as those burdened with thousands of pounds of student debt, cannot afford to take advantage of these opportunities.

Craig is nearly a month into his unpaid six-month internship and is already struggling.

"It's very difficult. I'm also working part-time on a Friday evening and Saturday to support myself. I've got enough money for this month but after that I'm going to have to leave my internship."

Graduate exploitation?

Concerns have also been raised that companies recruiting unpaid interns, like Craig, are actually breaking the minimum wage law.

Craig is expected to work full-time office hours, Monday to Friday, with a list of specific duties.

The legal definition of what constitutes work includes having set hours; being engaged for an extended period of time and being given a defined role rather than just observing.

The law says anyone who is "working" must be paid the national minimum wage - for anyone 22 or over it is currently £5.80 an hour.

David Lammy MP
David Lammy says it is important for young people to know their rights

Recruiting graduates to work for free for periods of six months or more has led to accusations of exploitation.

The TUC says it is concerned about the number of unpaid internships advertised on the Graduate Talent Pool website.

It has been successful in getting some advertisements taken down that it believes breached rules on the minimum wage.

Matt Dykes, a policy officer from the TUC, says more needs to be done to stop graduates being exploited.

"This sends out entirely the wrong signals to young job seekers and to employers, appearing to condone the practice of not paying people for the jobs they're doing.

"Much more needs to be done to ensure employers know that these kind of internships are unacceptable."

David Lammy, the Minister for Higher Education, told 5 live's Donal MacIntyre programme: "If there are things going on, we want to know. We will take down those employers off the site, and it is important young people recognise and know their rights."

Craig says his employer is helping him to apply for assistance grants from his former university, but says he would probably be asked to leave if he asked the company to pay him.

The reason many graduates persist with working for free is the lure of a possible paid job at the end of their internship.

'Strung along'

Elliott is living at home with his parents near Dartford, in Kent, after completing a degree in psychology last summer.

He has undertaken two internships, which paid just expenses - the first for one month and another for three months.

He says he only took the second internship because of the initial promise of being offered a paid job at the end.

"There were three interns there. We all were under the impression that we would get a job, but it emerged there were never going to be three jobs," he says.

Elliott left his second internship after two months, as he felt he was being strung along with a false promise.

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He feels strongly that they should have been paid at least the minimum wage.

"When you're asking people to do important things which a company needs to be done, and you want them to be there over a long period of time, it does become work which needs to be paid."

However, if Elliott and Craig were living in Wales, they would be in a more fortunate position.

The Welsh equivalent website of the Graduate Talent Pool - Go Wales Work Placements - guarantees a minimum £240 per week, for 10 weeks, for anyone who finds an internship through the site.

In England, interns are eligible for Job Seekers Allowance, but only if they have already been claiming the benefit for six months prior to starting their internship.

In Scotland and Northern Ireland, there are no official internship schemes as of yet.

Mr Lammy remains confident in promoting internships for graduates, and sees them as an effective resource in helping to kick-start careers.

"The number one priority is to support young people in the employment market. I think the Graduate Talent Pool does that.

"Do we want young people to have these skills on their CV, or do we want them sitting at home?"

Listen to the full report on the Donal MacIntyre programme on BBC 5 live on Sunday, 7 February at 19.30 GMT. You can also download the free podcast or listen via the BBC iPlayer

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