WHY MORE WAGE CHEATS COULD FACE PROSECUTION IN FUTURE

There have been calls for firms that employ unpaid interns to be prosecuted, not just fined or told to reimburse workers’ missing pay.

Speaking shortly after 350 firms – including Debenhams, Subway and the Co-Op – were named and shamed by HM Revenue and Customs for paying workers less than the National Minimum Wage, the TUC’s General Secretary Frances O’Grady said it was not enough that cheating employers were being asked to reimburse wages they should have paid workers originally. Instead, it is now time to get tough on bosses who brazenly flout the law, with steeper fines and proper prosecutions. O’Grady said:

“This [the list of wage cheats] should be a wake-up call for employers who value their reputation. If you cheat your staff out of the minimum wage you will be named and shamed.

“But we also need to see prosecutions and higher fines for the most serious offenders, especially those who deliberately flout the law. Minimum wage dodgers must have nowhere to hide. We need to see strong unions in every workplace to stop these abuses from happening.”

Currently, firms are warned there is a possibility of prosecution if they pay their workers less than the National Minimum Wage (£6.95 if you’re aged 21-24). But in practice we know this almost never happens. In fact, we believe it has happened only six times (none of which resulted in jail terms) and none of these incidents involved unpaid internships. Today, Graduate Fog’s founder and campaigner for fair internships Tanya de Grunwald backed O’Grady’s calls for tougher penalties, saying:

“For many years, it has been this website’s belief that the Government is far too soft on employers who cheat their employees (including interns) out of the wages they must pay by law, and that the only complaints process available to them is not fit for purpose.

“For starters, it relies far too heavily on former interns coming forward – something few are prepared to do, for obvious reasons. Worse still, many who do complain experience long delays, and some even have their cases dismissed on grounds that have no legal basis. For example, an intern may be told they’re not entitled to back pay if they agreed to work for free at the time – which is absolute nonsense. Additionally, it is still only possible to make a formal complaint about an employer if you are a former intern there yourself – so you (or we) can’t report adverts for unpaid internships that we have seen, however brazenly illegal they may be.”

And De Grunwald went even further, calling for a change in management of the problem of unpaid internships. She slammed the Department for Business (which oversees HMRC) for “failing to fix the problem in the seven years I’ve been campaigning on it, whether that’s because they’re unable to get to grips with it – or unwilling”. She added:

“Personally, I think it’s time to for the problem of unpaid internships to be handed over to the Department for Education (DfE), which has a vested interest in it. Unfortunately, the DfE is currently insisting the issue is outside their remit. But I’ve explained to them that unpaid internships are not just a post-university thing – it’s increasingly common for undergraduates and college students to do them too. Alos, too many universities are still promoting unpaid positions to their students – and as the DfE is responsible for universities, I’d argue this is their responsibility to sort out.”

De Grunwald warned there was one final reason the DfE should step up. “If they doesn’t fix the unpaid internships problem, many of their other social mobility initiatives involving children and young adults from poorer backgrounds will fail as, when those people graduate, they will find themselves unable to jump the final hurdle required of them – working for months (or even years) unpaid, before employers will consider them for paid work,” she said: “We know this will happen in future, because it is already happening now.”

* IS IT TIME TO GET TOUGH ON INTERN EXPLOITERS?

Would you like to see steep fines and proper prosecutions? Why do you think the Government hasn’t been tougher with firms that pay their interns less than the minimum wage? Do you agree that it may be time for a different department to have a go at tackling this problem, as the Department for Business has had seven years to fix it, and has failed?