Letters will warn suspected firms of being ‘named and shamed’ and fined £5,000 if they use long-term unpaid interns
The government will toughen enforcement against employers who do not pay the national minimum wage today when it writes to hundreds of companies warning them they could be targeted for on-the-spot checks by the taxman.
HM Revenue and Customs (HMRC) will warn 200 businesses who have advertised placements for unpaid intern-ships that they could be “publicly named and shamed” and may be liable for a £5,000 fine if they are found to be in breach of national minimum wage laws.
The move will coincide with the launch of a national campaign to educate students about their employment rights as they enter the job market.
HMRC said that from the tax year in April, it had issued penalties to 466 employers, a significant rifrom 2009/10 when just 381 employers were issued with an HMRC penalty for not paying the minimum wage, currently at £6.31 for those aged 21 and over.
Business, Innovation and Skills minister for employment, Jo Swinson said there was “increasing concern” around unpaid internships especially in the current economic climate.
“Those occasions when you have people working for months on end for free, really is problematic.” Letters from HMRC would “keep businesses on their toes”, she said, and ensure they were “properly assessing the legality of what they are doing”.
“We don’t want to have a system where people get exploited and companies try to help themselves to free labour … when receiving these letters I would hope that firms think very carefully about how the law [operates] for the opportunities they’re offering.”
Swinson, whose department has oversight of HMRC enforcement on minimum wage laws, said that from next year the budget to fund ongoing work on this issue would rise by 10%.
“This is an area where we do need to have greater priority focus which is why we’ve moved resources from other parts of the department,” she said.
Swinson singled out certain sectors such as the fashion industry and the media, where problems were more acute and encouraged people to contact the Pay and Work Rights Helpline on 0800 917 2368.
“Any industry which is incredibly difficult to get into and perceived as very glamorous is one where the basic laws of supply and demand mean that there will be people who are willing to work for free and that’s something some companies can ultimately be very tempted by.”
The HMRC letters will say: “If you have got things wrong, but you put them right now, we will not charge you a penalty. If you wait, and we select you for a check and discover the problem, we may charge you a penalty of up to £5,000 and you may be publicly named and shamed by the Department of Business Innovation & Skills as an employer who isn’t paying [national minimum wage].”
Gus Baker from the campaign group Intern Aware said: “It’s fantastic that after such a long time the government is moving forwards and starting to tackle the issue of unlawful exploitative unpaid internships. However we are yet to see the impact of this on the ground. Too many employers feel they can get away with asking young people to work for nothing.”
Information taken from The Guardian.