ONLY SIX PROSECUTIONS IN FOUR YEARS, FINDS GRADUATE FOG
Shocking statistics discovered by Graduate Fog suggest that the official complaints procedure in place to protect interns from exploitation needs an urgent re-think. Left as it is now, the current system will fail over a hundred thousand vulnerable young workers this year.
Despite a recent estimate from Internocracy and the IPPR that 128,800 interns are currently working for less than the NMW or nothing at all this year alone, a government document from the Department of Business, Innovation and Skills reveals that:
Only SIX employers have been prosecuted for ‘non-compliance’ (ignoring) the National Minimum Wage laws in this country, since 2006. As this figure includes all cases involving the NMW, the number involving internships is likely to be even lower.
In 2008/09, the official National Minimum Wage Helpline handled only 34,704 enquiries — 12,000 less than the previous year. Even if all these calls were to report unlawful internships (which they weren’t), this would still only mean 25% of exploited interns had phoned in.
Also in 2008/09, only 1,746 cases of ‘non-compliance’ were identified among employers. Just 96 ‘enforcement notices’ and 30 ‘pentalty notices’ were issued.
The same year, nearly £45m was recovered in lost wages — but this works out as only £193 per successful complainant, which sounds low to me. Interns working for a month unpaid are entitled to around £928 in back-pay, and those working for three months should earn around £2,784.
Graduate Fog believes that the number of young workers who complain to the authorities is only the tip of the iceberg. I also believe that the back-pay awarded is far lower than it should be — and the number of companies that receive serious punishment for their crimes does not reflect that massive scale on which this exploitation is happening around the UK today.
Meanwhile, I have spent the last THREE WEEKS trying to report the seven companies we have caught advertising unpaid internships — and I am still unable to submit my evidence, thanks to a shambolic complaints system which appears to be designed to prevent complaints from being made (?!).
So, if you’re interning for free and wondering why your boss is still refusing to pay you fairly for your work — the answer now seems clear:
It’s because nothing much happens to employers when they break the law.
What’s going wrong?
Three things:
1) Not enough exploited workers are making complaints — and the number is falling. The government document reveals that in 2008/9 the official NMW helpline handled only 34,704 enquiries (Remember, only a small fraction of these will be regarding unpaid internships, as this is a general NMW helpline). And — even more shockingly — this number is 12,000 less than the previous year. Are employers becoming better behaved — or has complaining become an increasingly unattractive option for workers facing the fall-out of the recession, increased student debt and ever-tougher competition for jobs? Certainly most interns I speak to feel too intimidated even to raise the subject of pay with their employer, let alone make a formal complaint against them if they refuse to stump up for their wages. Interning is all about striving to make a good impression — and we all know that asking for cash is not a good look. So the assumption that workers should always want to report their employer for exploiting them is incorrect. This is a fundamental problem that needs addressing urgently. If the system doesn’t work for the victims, it doesn’t work at all.
2) Penalties aren’t tough enough. The same document reveals that the main aim of the current system is to recover lost wages for each worker who complains about their employer. It is NOT to shame or scare the living daylights out of employers who exploit their staff — to stop them from doing it again. So all that happens — even in most ‘successful’ cases — is that the employer pays the worker what they should have paid them in the first place. The document boasts that almost £45m has been ‘recovered’ in lost wages — but this actually only works out as £193 per successful complainant. Given that many of you work for months on end with no pay, this sounds very low to me. (A month on the NMW means you’re eligible for around £928 in back-pay. Three months entitles you to around £2,784). And to face prosecution? An employer must be a repeat offender. Which means multiple complaints must have been brought — and proved — against them. Given the tiny number of workers who report their employer (see above) and the shambolic state of the complaints procedure (see below), what are the chances of that happening? The document also hints that it may simply be too expensive to prosecute more cases:
We recognise that it is widely perceived that prosecutions have a deterrent effect and that we need to strike the right balance between prosecutions, civil enforcement and other forms of deterrence, such as greater transparency in cases of non-compliance.
As part of the work that is being done on our compliance strategy… we are looking at whether it is possible and appropriate to prosecute more NMW offences.
We are examining our policy on civil and criminal enforcement to ensure that we get the most impact from the budget available for NMW enforcement.
The document also shows that in 2008/9, only 96 ‘enforcement notices’ were issued and 30 ‘penalty notices’ were issued. I’m still working to understand what these involve (they’re fines, presumably?). But I understand that the identities of companies that receive these notices are kept secret by HMRC, whose staff are banned from discussing details of specific cases with ‘third parties’ (including journalists). So even if a company is penalised for breaking the law, no-one ever hears about it.
3) The reporting system is a shambles. Sorry HMRC — I know your staff are good folks — but it is! The document congratulates itself on the recent “streamlining” of its helpline, to make it easier for workers to lodge complaints:
Previously, there were five separate helplines about government-enforced employment rights, operated by five enforcement bodies.
The new helpline has significantly simplified and streamlined access to these bodies. It enables workers and employers to obtain information and advice and report abuses in these areas all via one number.
In this way, the burden of navigating the system is transferred from the worker to the system itself.
Oh really? If this system is so ‘streamlined” then why – THREE WEEKS, SEVEN EMAILS and TWO PHONECALLS later – am I still unable to submit the evidence I have carefully collected about the seven high-profile companies that Graduate Fog has caught advertising for unpaid internships? (Full, astonishing story to follow tomorrow).
In fact, I believe the current system makes it difficult for any third party to make a complaint against employers who ignore the NMW laws — whether that’s me or a wannabe-intern who is excluded from the opportunity because they can’t afford to work for free. After all, since they won’t have worked for that employer, they aren’t ringing the helpline to try to claim back-pay. So can they still make a complaint? If yes, how easy is this to do — or will the awkward procedure mean they give up before the complaint is properly logged? And even if they stick with it, will they ever find out what happened (since there are strict rules about how much ‘third parties’ are allowed to be told about individual cases)? Has anyone tried doing this? Graduate Fog believes that if HMRC is serious about gaining intelligence regarding incidents of non-compliance from the many ‘eyes and ears’ out there, it must make this process easier for us.
So those are the three counts on which I think the current system is failing the vulnerable workers it is designed to protect. It seems to me that the current complaints procedure is stacked in favour of the exploitative employer – and against the exploited worker.
It’s particularly shocking since the authors of the document clearly do understand how much is at stake if the NMW laws are not enforced effectively. Right at the top of the document, they state:
This year marks the 10th anniversary of the NMW. Despite the controversy at the time of its introduction, it has become an accepted feature of the British employment landscape. It is also a vital one, particularly in the current difficult economic times, as it provides an important floor below which wages cannot fall and a level of protection for all workers.
I couldn’t agree more.
But if the Department of Business, Innovation and Skills truly believes this, why is the current system so hopeless at protecting vulnerable workers?
*Should the government get tough on companies that ignore the NMW laws?
What could the Department of Business, Innovation and Skills do now, to prove that they take the plight of unpaid interns seriously?
The process ought to be easier for those who want to report on the thing anonymously, and perhaps even indirectly – say if your friend’s working for less than min. wage, and it would be too obvious that they were the complainant, it ought to be easier to tip HMRC off about it.
I believe in open justice but this is just such a tricky area when you’re a relatively inexperienced worker in a competitive (read: media, PR, broadcast) industry.
Has is ever occurred to you that the reason only 25% of “exploited” interns have called in is because the other 75% don’t feel like they are being exploited? The fact is, an internship is optional — no-one is being forced to do one, and everyone who decides to follow that preference knows what the deal is as far as money goes — they can always just say no — not tackle the employer later demanding money which they know was never part of the deal. I have just completed an internship and found it to be an incredibly valuable experience which undoubtedly helped me secure my new job. And no, I never once felt exploited.
The fact is you are going to end up ruining employment opportunities for young people everywhere with this crazy crusade! If by law everyone had to start paying NMW then why the heck would they hire interns with no experience over someone they can pay the same amount to with experience?! In which case, those who can’t get a job because they have no experience, continue to have…no experience…. Do you understand the vicious cycle likely to emerge here?!
Jim – there’s a difference between two weeks’ work experience and a three-month ‘internship’: read, junior job. We’re talking about stuff like PR interns pulling in billable work, for starters, journalists working on skilled investigative work. See this PR Week article for more
Jim-
The problem is that whether interns feel that they are being exploited or not, they are! Not paying someone for work (carrying out specific task and duties and often working a 40+ hour week) which a salaried employee would normally do, is exploitation! The only reason why, perhaps, some interns don’t realise this at the time is that they are inexperienced, eager and green. All the more reason why this is most definitely exploitation. It’s also very important to note that many people cannot afford to intern for weeks or months on end without fair remuneration. Not to mention the fact that this practice is illegal… and for a reason!
Ellie – but what can you really learn in 2 weeks?! that’s more work experience – a shadowing opportunity. A longer internship means you get properly trained up – which for a skilled profession, you can’t be in 2 weeks…
My friends just have a weary acceptance of unpaid internships as if there is no other way. I think that the government should definitely get tough on companies not paying their interns NMW and the whole situation should be made legal. As has been said many times before, unpaid internships discriminate against those who cannot afford to work without being paid.
Tanya – don’t give up!
Chris
Jim – saying that young people shouldn’t be paid for on-the-job training is, to me, like saying we should pay to be educated. Young people can’t afford to work for nothing, and in my opinion it’s humiliating for them to have to do so. I’m not saying it needs to be more than the minimum wage.
and also – do you really think company’s should pay to have someone come in for 2 weeks? I don’t know if you’ve ever had to train up someone before or deal with the work experience kid, but it’s certainly not the easiest job to do…why would companies pay to do that when it is a hindrance on their staff? They are much more likely to just say forget it
Jim – two week’s work experience doesn’t warrant a wage, as I said.
Christopher – that really depends on the internship. Not all interns are given mass responsibilities or made to work 40+ hours (they shouldn’t for starters – they should just say no! People need to take some responsibilty for their own experiences…) That’s a stereotype. I certainly was never put under any pressure or obligations – and saw the whole placement as a learning experience which helped me to get a job! All the rest of my mates have sat at home, doing nothing (not earning any more money can I add…)and still haven’t managed to get employment. Surely it’s better to be interning than doing nothing?!
Ellie – did you? sorry…didn’t see that…? See – I think saying someone has to be paid for an internship is like saying we should be paid to be educated? In the same way that it’s a choice to continue education – it is also a choice whether or not to take on an internship. Without a doubt, on the job training in a permanent, full-time role should be paid – but that’s because you obviously must already have the experience necessary to be enough of an asset to the company to get hired. Whereas for those struggling to get a job because they lack experience, an internship is a good option. Just think – if you want to be a doctor, you have to train for an extra 2-3 years longer than everyone else, and pay for it…but this isn’t seen as exploitation? Perhaps there needs to be some government loan scheme to help those with funding issues, but I just think that if company’s are going to be made to pay, then opportunities are going to be lost.
Thats great that you enjoyed your internship Jim and also that you were in the position to be able to afford to take one up…
However, what would you say to the graduates living outside the commuter belt to London (where the vast majority of these internships are) who cannot afford to take up one of these internships? Tough luck? Where are we meant to gain such invaluable experience?
They are exploiting their interns and being unfair to those who can’t afford to intern!
Jim – with all due respect to doctors, they need the education. Traditional industry hotspots for internships (media, PR, broadcast) aren’t ever going to save lives – not directly. Learning manual skills like sewing stitches, inserting a catheter or doing a full-body exam are a world away from writing press releases, reporting a council meeting and doing post-production on a film.
Jim. I do agree with you. I just believe that a distinction needs to be made very clearly between short-term “shadowing” in which all the intern does is observe and he/she is not effectively “working” and internships in which the opposite occurs. And it certainly does occur! I’m glad to hear that you found your internship experience to be valuable and it sounds like it was conducted in the right way. However there is undoubtedly a large number of companies abusing the internship system to exploit young people by effectively using them as unpaid slave labour. And this is what we are against. This is a pretty good overview of the issue by the Guardian- http://tinyurl.com/msdu9f
“Concern has become acute because of the huge numbers leaving university this year without a job. Official figures are likely to show one million young people in total out of work by the autumn.
Under the National Minimum Wage Act, interns who work rather than observe should be paid, but employers have taken advantage of a legally grey area, and the willingness of young people, to pay just expenses, or nothing at all.”
That sort of sums it up for me really.
How many of these internships offer substantial amounts of nationally accredited training that would be of equal value in a similar (paid) post elsewhere?????
I suspect a lot of what is claimed to be on the job training is either unnecessary (because the core skills have already been developed at the undergrad stage while working or studying)or could be effected more quickly through employer-funded formal training and employment in a paid job.
If you really want to see exploitation Tanya, get off your computer,get out your bedroom, and go see some third world countries. All anyone wants is to work less for more nowaday. It’s ridiculous. That’s the last thing this country needs
Why didn’t you publish my contribution to this debate Tanya?? Why is it that you can happily dish out the criticism but not take it?
Ellie – I completely agree that doctors may need a bit more training than someone doing some media sector job – but that’s why they take 2-3 more years to train… not the 2-3 months of an internship…
Katie — Yes, I was able to afford to do an internship, but only because a) I had worked throughout my university degree and saved some money and b) took on a second job — a few bar shifts a week — during my internship. Unfortunately I couldn’t rely on ‘rich parents’ as the internship stereotype suggests that all those that take on an internship must do. Yea, I had to work a bit harder — but big deal? And if you live too far to commute to London — then shouldn’t you be campaigning to get more internship opportunities in an area near you rather than just complaining? Most are in London because it’s London…the capital of England…the highest area of commerce…but I am sure that isn’t completely exclusive…
There is a big difference between training as a doctor and doing an internship. The training to be a doctor is specifically required to become a doctor (a paid job) whereas in some cases unpaid internships might not lead to a paid job. A graduate who is not rich and has to find a paid job to pay their rent was not told that they would be expected to spend 3 years doing a degree and an unpaid internship and may not be financially prepared for it. The student doctor knew how long it would take for them to complete their training and has been able to prepare financially for it by being very careful with their money.
Actually – there are a few intern recruitment companies where all their internships lead to paid, permanent positions (I can vouch for that, as can numerous friends / associates). If you go through a genuine company, you will get genuine results. Just like those doctors…
Jim as you so rightly mentioned the majority of the iternships are in London because its the capital of England and the highest area of commerce how then do you think my campaign to get more of these fantastic opportunities to work for nothing in the north of England is going to go? The majority of PR companies for example are based in London, why would they open up an office in the north of England just to allow them to offer graduates an internship? It’s just not going to happen… its not like they have a shortage of applicants for the posts in London but that still doesn’t mean that its fair. Ultimately it means a less suitable candidate may find themselves gaining the experience to propel their career over a more deserving candidate just because of their postcode! A friend of mine was fortunate enough that his parents could afford to pay for him to live in a youth hostel for 2 months whilst he worked as an intern in London for one of these companies but I’m afraid its a minority who are able to do this. I am not saying that there are no internships in yorkshire where I am based but they are few and far between and therefore the competition for them is crazy. I did not mean to liken you to the ‘rich parent’ stereotype but merely suggested you were fortunate enough to be able to afford to take up unpaid work where many are not. I too worked throughout university and even with a second job would struggle to be able to support myself whilst working as an unpaid intern for one of the few elusive opportunities in the north of England.
On a side note can I take this opportunity to promote a site I regularly use? http://www.graduatesyorkshire.co.uk/ definately seem to have the right attitude where internships are concerned… see their policies here http://www.graduatesyorkshire.co.uk/internships/graduates/
@All – Ace debate yesterday and today – thanks to everyone who’s contributed! Sorry I was a bit quiet but I had a deadline for some (paid!) work yesterday so had to prioritise that – but I was with you in spirit!
@Jim – It looks like you’ve had some good discussion with some other Foggers about the whole internships issue, which is as we all know is riddled with complexities and contradictions! I’d like to be clear that whatever your views on this debate, you are very welcome to contribute on Graduate Fog (as long as your comments remain gentlemanly of course!) In fact, I am actually keen to understand your viewpoint better, as you are not the first person to say this kind of thing – and it is puzzling and fascinating to me that not all interns agree on this subject. Are you irritated (?) by me raising this subject because you think i’m presenting your generation as victims who need rescuing? Or is it that you feel it’s unhelpful for me to challenge the status quo because you’d prefer to concentrate on getting your head down and working within the current system, rather than using up any headspace by challenging it? I’m genuinely interested to hear what you think.
It also really troubles me that you seem so convinced that without experience, your work is worth nothing to companies. This simply isn’t true. And the fact that you believe this is NEW. When I graduated in 2000, I and most of my friends walked pretty much straight into jobs, with next to no experience. Most of us were being paid salaries of 18-25k. That was just the way it was – and it wasn’t that long ago! (Although at 31, I probably sound like a grandma to you!)
I also disagree with the person who raised the point that companies shouldn’t be paying for inexperienced graduates – and that this should be subsidised, either by the state or by universities. Again, this is new. Ten years ago, MOST companies (with the possible exception of media) understood that when they hired a new graduate, they would need to train them up as part of the job. It was factored in that they would need a fair bit of hand-holding for the first three months or so, but if they’d picked a good person, that person would pick it up quickly and be working productively shortly afterwards. It was the norm to invest in your young staff like this. This has changed, as companies have realised they hold the power in the job market. I believe they are trying to convince workers that you are not ‘worth’ paying, or that your work is of a lower value than the same ‘green’ graduates that they hired 10 years ago (people like me) but this is simply not true. And I find it depressing that you not only believe it that your work is so value-less, but also that you are so keen to convince your peers that their work is similarly worthless, without this much-prized ‘experience’.
@Chris Smith – Following on from what I’ve written above, can you expand on the root of your friends’ “weary acceptance” of unpaid internships as just the way things are? Again, this really is interesting to me and I need to understand the mindset here.
@Jasi My apologies for not the fact that your comments last night did not appear on GF immediately. I should explain that in order to stop lots of skanky spam appearing all over GF, I have a system where WordPress emails me every time a user posts a new comment. I then log in to WordPress and approve it, as long as it’s not sweary – or from some pushy PR using my site to flog you guys some random tat! I do NOT only approve comments that agree with me – I promise : )
In answer to your point about internships vs ‘real’ exploitation in the third world, I take your point. I actually had the very same thought when I watched the recent documentary on Zimbabwe’s Forgotten Children, which i found extremely disturbing. I would like to apologise if you felt that I was in any way comparing UK internships with the extreme exploitation that we know goes on in other countries around the world. Clearly, UK interns are not made to work 20-hour days in darkened rooms until their fingers bleed, for which I think we are all very grateful.
However, I am not about to soften my approach to unpaid internships within the UK, in light of this. The simple reason is that we do NOT live in a third world country – we live in a first world country, where we believe that everybody should be paid for the work that they do – and nobody should have to work for less than a certain level of pay – and certainly for not pay at all. That’s why we have the National Minimum Wage laws in this country – and it is comparatively difficult to find people who disagree with this law in principle (unless it’s for economic reasons). So yes, internships are not ‘exploitation’ in the third world sense, but in the parameters of our supposedly ‘civilised’ society, I believe they are.
It is also important to remember that at the extreme end of this debate there is a very serious and dark reality here. If you didn’t read about Vicky Harrison at the time of her death, I suggest you look her up. She was a bright young 20 year old who committed suicide after receiving hundreds of rejection letters for jobs. Vicky – who lived in Lancashire – wasn’t an unpaid intern – but you could argue that she was one of the people ‘locked out’ of the workforce because she couldn’t afford to work unpaid – whether locally or in her nearest big city – in order to break in to any industry. I don’t mind telling you that I was – and still am – haunted by Vicky’s death. And I live in fear that it will happen again. In THIS country, in 2010, we cannot allow this to happen again. This debate IS important, and I’m going to continue to raise awareness about it.
You are welcome to comment again if you disagree with me, but I ask that you adjust your tone if you do. I will not approve posts that are aggressive towards me or any of my users. Thanks xx
@ Tanya – I am irritated that you are potentially going to ruin thousands of opportunities for thousands of people – it’s already hard enough out there! If companies are forced to pay minimum wage for interns they don’t need then they will just say forget it – we’ll invest in more advertising instead! And I’m afraid that 2000 – ten years ago – is a long time ago! (no offence…) Things have changed. We are in a recession. More people than EVER before are going to uni, more people than ever before are graduating, and more people than ever before are applying for each and every job position – hence, the competition is much harder than what it was for you – you NEED to have more on your CV and you NEED to be able offer more to even get an interview /look in nowadays. And trust me, I don’t undervalue myself, but unfortunately employers don’t know me, and I can’t be truly represented by what is on a piece of paper, hence doing an internship. And what is a couple more months unpaid work? I never lost anything – all my expenses qwere covered – and really enjoyed doing something valuable that didn’t involove sitting in a library – which is the problem with a lot of UK degrees – that they are far more academic based, and not enough about practical experience. Can I ask why you are so against internships anyway? Did you have a really bad experience before?!
@Jim
Just a quick comment. I completely, 100% agree with you that degrees need to be much more vocational in the UK. It is my belief that the fact that this is not the case and many degrees are highly academic is the root of a lot of the issues which are faced by graduates today in an increasingly competitive and tough job market. However I disagree with your take on unpaid internships. I agree that networking and acquiring experience in your chosen industry is of the utmost important but it is my opinion that it would be much better if this was incorporated into the degree structure meaning that all students would have practical experience and skills as well as academic knowledge once they graduate, thus eliminating the issues graduates now face i.e. having a non-practical qualification, no work experience and no funds to carry out work experience…
@Jim
Thanks for replying – I think I’m starting to see what your concerns are. Believe me, I really do not want to make your life any harder than it already is, honest! What’s more, I too wrestled with this conundrum, when considering whether to make the complaint at all. If you don’t believe me, click here. You will also see that it was only once I was sure I had the support of the GF tribe – which contains both those who can afford to work for free and those who can’t – that I pressed ahead with making my official complaint.
Unfortunately, young people being forced to undercut each other on wages (which is in effect what is happening here) is only making things worse for all of you. The NMW was set to protect the most vulnerable, lowest-skilled workers. It is designed as a set ‘floor’ to stop these workers from undercutting each other on price – and driving wages down for everybody. This applies in exactly the same way to interns – and the fact that the NMW has not been enforced for you has had this extremely predictable result.
I honestly believe that unpaid internships are no kind of solution. Instead, they are a big part of the problem. I firmly believe it is the employers we should be attacking here – and the government, for their failure to get tough on employers. I believe you have been let down on massive scale.
What’s more, the situation is getting worse every y ear. I’ve seen how quickly the ‘goalposts’ move – making it harder for each cohort of graduates, every year. This year, you might need, say, an average of six months’ unpaid experience before you can get paid work… Next year it will be nine months… The following year it will be a year… I sincerely believe we need to stamp this out now. It is already completely out of hand.
You’ve only caught seven companies????
As in, there are hundreds out there!
Ha ha, yes i know there are hundreds – thousands in fact! But following them all up would be a full time job! Plus it makes a better story to go for the big, well-known companies so i have to limit my work to embarrassing them… Plus i assumed that chasing these companies (Tesco, Harrods etc would mean we’d be more likely to get some pick-up from the mainstream press… What I failed to factor in was that the mainstream press couldn’t care less about this issue – as they all use their own unpaid interns! : ( Still, we’ll find a way…
Yep, and the media who are reporting on this probably treat their interns worst out of the lot. (She says, desperately trying to get a media internship)
Tanya – not everywhere’s like that – The Guardian, for instance, and the Beeb; as principled as it gets. Customer magazine publishers tend to be very generous as well. You WILL get this published! Best of luck.
@Ellie
Yes, those outlets run stories on it occasionally, but I always feel like they’re just paying lip service – in fact when BBC news invited Internocracy’s (fabulous!) Becky Heath on, I felt they were really sneering at her – and the whole intern issue. I wrote about it at the time:
Sneering journalists betray unpaid interns:
https://graduatefog.co.uk/2010/850/sneering-coverage-betrays-youn/
Plus, I’m not sure if it’s true but whenever the Guardian discuss it online, somebody always comes out of the woodwork saying they’ve done an unpaid internship there – either recently or in the past…! And I’ve worked at the BBC unpaid…
Thanks for the link. I’m sorry, I didn’t mean to patronise, I know you’ve been reporting on – and subject to – the intern mill for a long long time. You’re doing a fantastic job, and your work has become even more pertinent in light of uni cuts. I hope some of the energy of the demonstrations gets behind the story.
@Ellie – Ha ha, I didn’t think you were patronising at all and your comments and views are always welcome! I just mean that I’ve been shocked and disappointed by how little coverage this issue has received and am afraid i’m having to draw the conclusion that most of these media companies have their own reasons for keeping this story out of the headlines…. But maybe you’re right, maybe i shouldnt’ let my conspiracy theories get out of hand?! But then I think – oh come ON, Tesco and Harrods using unpaid interns?? WHY isn’t that in the newspapers???