Hiring an Intern: UK Employment Law Guide

Hiring an intern is often treated by UK employers as a low-risk, informal recruitment decision. In practice, it is one of the most common sources of National Minimum Wage breaches, worker misclassification and avoidable enforcement action. The legal framework governing internships is not built around the label “intern” at all. Instead, it turns on statutory definitions of work, worker status and employment rights, applied strictly by HMRC and employment tribunals, often with little regard to employer intention or good faith.

For HR teams and business owners, the decision to engage an intern is therefore not a branding or talent-pipeline exercise. It is a compliance decision with direct cost, regulatory and reputational consequences. An incorrectly structured internship can expose an employer to backdated wage liabilities, civil penalties, tribunal claims and public naming by enforcement bodies. These risks have increased materially in recent years due to enhanced HMRC enforcement activity, greater awareness among interns of their rights and a clear policy shift against unpaid work in commercial settings.

This article approaches internships from a compliance-first employer perspective. It assumes the reader understands basic employment concepts and needs clarity on how the law is applied in practice, not how internships are marketed or described. The focus is on defensible decision-making, risk control and lawful structuring, rather than theoretical distinctions or best-case assumptions.

What this article is about

This guide explains how UK employment law treats interns, when interns must be paid, what employment rights they can acquire and how employers can structure internships in a way that aligns with both legal obligations and commercial realities. It examines the statutory framework, HMRC’s enforcement approach and common failure points, with particular attention to grey areas such as unpaid internships, student placements and short-term work experience. Throughout, the emphasis is on what employers must decide, what the law requires and what happens when those decisions are wrong.

Section A: What is an intern in UK employment law?

The starting point for any compliant internship arrangement is understanding that UK employment law does not recognise “intern” as a legal status. The term has no standalone meaning in statute. It is not defined in the Employment Rights Act 1996, the National Minimum Wage Act 1998 or any other core employment legislation. As a result, calling someone an intern does not determine their rights, pay entitlement or legal protections.

In practice, this is where many employers go wrong. Internships are often offered on the assumption that they sit outside normal employment rules because they are short-term, educational or informal. That assumption has no legal basis. Instead, the law requires employers to classify individuals based on what they actually do, how the relationship operates in reality and whether the statutory tests for employment or worker status are met.

From a compliance perspective, the key question is not “is this person an intern?” but “what is this person in law?”

1. Legal classification takes precedence over labels

UK tribunals apply established employment status principles, looking at the reality of the arrangement rather than labels, job titles or how the parties describe the relationship. Job titles, offer letters and internal descriptions are given limited weight if they conflict with what happens in practice. An individual described as an intern may, in law, be:

• an employee
• a worker
• a genuine volunteer
• or someone undertaking limited work experience that falls outside pay requirements

Each classification carries materially different legal consequences, particularly in relation to pay, working time, dismissal protection and discrimination claims.

For employers, the risk lies in assuming that an “internship” is a category in itself. It is not. Interns fall into existing legal categories, and once they meet the definition of a worker or employee, statutory rights attach automatically. There is no ability to contract out of these rights, even by express agreement.

2. The statutory framework that applies to interns

Two pieces of legislation are central when assessing intern status.

First, the National Minimum Wage Act 1998 determines whether an individual is entitled to be paid. The Act applies to “workers”, a deliberately broad category designed to capture most people who personally perform work or services for another party. If an intern meets the definition of a worker, the right to be paid at least the National Minimum Wage applies regardless of how the role is described.

Second, the Employment Rights Act 1996 governs employment status and associated rights. Where the relationship goes beyond worker status and meets the tests for employment, the intern may also acquire rights such as statutory notice and, subject to qualifying service, protection from unfair dismissal and statutory redundancy pay.

It is also important to recognise that HMRC and employment tribunals may assess status for different purposes. HMRC will focus heavily on whether the individual is a “worker” for National Minimum Wage compliance. Tribunals will examine the wider employment status picture when determining employment rights. In both cases, decision-makers will look past contractual wording if it does not reflect the reality of the arrangement.

The practical consequence is that intern status must be assessed at the outset, not retrospectively after problems arise. HMRC and tribunals will look at how the arrangement operates in reality, not how the employer intended it to operate.

3. How status is assessed in practice

When assessing whether an intern is a worker or employee, decision-makers focus on several core factors. No single factor is determinative. Instead, the overall picture is assessed.

Key considerations include whether the individual is required to perform work personally, whether the employer benefits from that work, whether there is an obligation to provide work and an obligation to accept it, and the degree of control exercised by the organisation. Where an intern is carrying out productive tasks, contributing to output or replacing work that would otherwise be done by paid staff, the risk of worker status is high.

Crucially, the fact that the intern gains experience, skills or a CV benefit does not prevent them from being classified as a worker. Personal development is not a substitute for pay in UK law. This point is repeatedly misunderstood by employers and is a common trigger for enforcement action.

4. Why misclassification is a high-risk area for employers

Misclassifying an intern as outside the scope of employment law does not simply create a technical breach. It exposes the employer to cumulative risk. Once an intern is found to be a worker or employee, liabilities can include backdated wages, unpaid holiday pay, pension contributions and penalties for National Minimum Wage breaches. These liabilities often arise after the internship has ended, when the individual has little to lose by challenging the arrangement.

From a governance perspective, the reputational impact can be as significant as the financial exposure. Enforcement action against unpaid internships attracts disproportionate scrutiny, particularly where the employer is perceived to have benefited commercially from unpaid labour.

Section A summary

There is no legal category called “intern” in UK employment law. Interns must be classified according to existing statutory definitions, and those classifications determine pay entitlement and employment rights. For employers, the legal risk lies not in offering internships, but in assuming that the label removes normal employment obligations. Correct classification at the outset is the foundation of any compliant internship arrangement.

Section B: Do interns have to be paid the National Minimum Wage?

Whether an intern must be paid is the single most common compliance question employers ask, and the area where legal risk is most acute. In practice, most disputes and enforcement action relating to internships arise not because employers intended to avoid pay obligations, but because they misunderstood how widely the National Minimum Wage regime applies.

The legal position is strict. If an intern is classed as a “worker” for National Minimum Wage purposes under the National Minimum Wage Act 1998, the employer must pay at least the applicable National Minimum Wage or National Living Wage for every hour worked. There is no general exemption for internships, training roles or short-term placements. The fact that an arrangement is described as an internship, or framed as a learning opportunity, does not alter this obligation.

1. The worker test under the National Minimum Wage Act 1998

The definition of a worker for National Minimum Wage purposes is deliberately broad. It captures individuals who have entered into a contract, whether written or oral, under which they personally perform work or services for another party, provided that other party is not a client or customer of a business carried on by the individual. In an internship context, this test is frequently met.

Where an intern is expected to attend at set times, perform tasks, follow instructions and contribute to the organisation’s output, they are very likely to be considered a worker. The existence of a formal contract is not required. In many cases, the contract is implied by conduct.

For employers, this means that informal arrangements create as much exposure as formal ones. A handshake agreement, an email offer or even an assumed understanding can be sufficient to establish worker status if the underlying facts support it.

2. What counts as “work” for National Minimum Wage purposes?

A common misconception is that an intern must be performing skilled or revenue-generating work to qualify for pay. That is not the legal test. “Work” for National Minimum Wage purposes includes any activity carried out for the benefit of the employer, whether or not it is complex, profitable or central to the business.

Tasks such as administrative support, research, social media assistance, event support or shadowing that crosses into active participation can all amount to work. Even where an intern is closely supervised, the employer may still derive benefit from their presence. That benefit is relevant when assessing whether the individual is personally performing work or services under the arrangement.

HMRC and tribunals take a pragmatic view. If the organisation gains value from the intern’s activities, and the intern is not free to come and go as they please, the risk of National Minimum Wage entitlement is high.

3. Training and learning do not displace pay obligations

Employers often rely on the argument that an intern is “learning rather than working”. While genuine training can be relevant in limited contexts, it does not automatically remove the requirement to pay. The law does not permit unpaid work simply because the individual gains skills, experience or insight.

This is a critical compliance point. Many internships are structured around the idea that exposure to a professional environment is itself the consideration for the work performed. That approach is inconsistent with National Minimum Wage law in a commercial setting. Where the intern is required to perform tasks or assist the business, the presence of a learning element does not negate worker status.

The only situations where training is likely to displace pay obligations are tightly defined, such as certain student placements that are a mandatory part of a UK-based course. Outside those scenarios, reliance on “learning opportunity” arguments is a high-risk strategy.

4. Short placements and trial periods

Duration is not a safe harbour. There is no minimum time threshold below which National Minimum Wage does not apply. Internships lasting a few days or weeks can still attract pay obligations if the worker test is met.

Similarly, describing an internship as a trial period does not avoid liability. Trial work is permissible only to the extent that it is genuinely necessary to assess suitability and is proportionate in length. Extended trial periods involving productive work are a common trigger for enforcement action, particularly where they are unpaid.

Employers should assume that any arrangement involving more than minimal observation carries a real risk of National Minimum Wage entitlement, regardless of how short it is.

5. Enforcement risk and financial exposure

National Minimum Wage compliance is enforced by HMRC, and employers should treat this as a regulatory enforcement risk as well as an HR issue. HMRC can investigate historic arrangements, require payment of arrears going back up to six years, and impose financial penalties in addition to back pay.

Arrears are generally calculated by reference to the National Minimum Wage rate that applied at the time the work was performed, with HMRC then assessing the total underpayment and any applicable penalty. Penalties can be substantial, and enforcement action may be accompanied by public naming.

It is also important to distinguish HMRC civil enforcement from tribunal claims. An intern may bring an employment tribunal claim for unpaid wages or holiday pay where they have worker status, while HMRC may pursue arrears and penalties as a regulator. Employers can face both routes of exposure arising out of the same facts.

From a commercial perspective, the cost of getting pay wrong often far exceeds the cost of paying an intern lawfully from the outset. This is particularly true where multiple interns have been engaged on similar terms over time.

Section B summary

If an intern meets the definition of a worker for National Minimum Wage purposes, they must be paid at least the National Minimum Wage. There is no general internship exemption, no minimum duration threshold and no allowance for unpaid work simply because the role offers experience or training. Employers who treat internships as outside the scope of pay legislation expose themselves to significant financial and enforcement risk.

Section C: Are unpaid internships ever lawful in the UK?

Although the general rule is that interns who qualify as workers must be paid, there are limited circumstances in which unpaid internships can be lawful. These circumstances are narrow, tightly defined and frequently misunderstood by employers. Most non-compliant internship arrangements arise not from deliberate avoidance, but from over-reliance on assumed exemptions that do not apply to the role in practice.

From a risk management perspective, employers should approach unpaid internships as an exception requiring careful justification, not as a default position.

1. Student placements that are part of a UK-based course

One of the most commonly cited exemptions relates to students undertaking work placements as part of a course of study. Where a placement is a mandatory and assessed component of a UK-based further or higher education course, the individual may be exempt from National Minimum Wage requirements.

This exemption is far more limited than many employers assume. It applies only where the placement is genuinely required by the course, forms an integral part of the curriculum and is undertaken by a student enrolled at a recognised UK educational institution. Optional placements, summer internships taken independently of course requirements and placements undertaken by overseas students enrolled at non-UK institutions do not fall within this exemption.

The exemption is also time-limited. To fall outside National Minimum Wage requirements, the placement must not exceed one year in duration. Where a placement extends beyond that point, pay obligations may arise even if the placement was initially lawful.

Employers must be able to evidence the educational requirement. Reliance on informal assurances from the student is insufficient. In practice, this means retaining confirmation from the educational institution that the placement is mandatory and setting clear parameters around duration, supervision and role scope.

2. Genuine volunteering and the charity sector

Unpaid work can also be lawful where an individual is genuinely volunteering for a charity, voluntary organisation or statutory body. In these cases, the individual must not receive any remuneration or benefit in kind beyond reimbursement of reasonable expenses.

This exemption does not apply to private sector employers, commercial organisations or social enterprises operating on a profit-making basis. Attempting to describe an unpaid intern as a volunteer in a commercial business is a high-risk approach and is unlikely to withstand scrutiny.

The distinction between a genuine volunteer and a worker is particularly important. If the organisation imposes obligations, requires attendance, allocates tasks or derives operational benefit, the individual is unlikely to be considered a volunteer in law, regardless of how the role is described.

3. Work shadowing and observational experience

In limited cases, unpaid arrangements can be lawful where the individual is genuinely observing rather than working. Short periods of work shadowing, where the individual does not carry out tasks, does not contribute to output and has no obligation to attend, may fall outside the scope of National Minimum Wage requirements.

The difficulty for employers is that many arrangements described as work shadowing quickly drift into productive activity. Once an individual begins assisting, contributing or performing tasks, even on a small scale, the risk profile changes significantly. HMRC and tribunals will assess the reality of the arrangement, not the original intention.

Employers should also be cautious of hybrid arrangements, where an individual undertakes some unpaid observation and some productive work. These structures are frequently challenged and rarely safe, as the presence of productive work can trigger pay obligations for the whole period.

4. Why most unpaid internships fail the legal test

The majority of unpaid internships in the private sector fail to meet the criteria for lawful unpaid work. This is because they involve structured roles, set hours, defined responsibilities and clear benefit to the organisation. These features are hallmarks of worker status.

A common mistake is assuming that mutual benefit makes an arrangement lawful. While the intern may gain valuable experience, the employer also benefits from their contribution. UK employment law does not permit that benefit to be exchanged for unpaid labour in a commercial context.

Another frequent error is relying on consent. Even where an intern explicitly agrees to work unpaid, that agreement has no legal effect if statutory conditions for pay are met. National Minimum Wage rights cannot be waived.

5. Employer decision-making in practice

For employers, the key decision is whether the role can genuinely be structured to fall within one of the narrow unpaid categories without artificial constraints or legal risk. If it cannot, the compliant option is to pay.

Paid internships provide cost certainty, reduce enforcement exposure and allow the employer to impose clearer obligations and performance expectations. In many cases, they also improve recruitment outcomes and employer brand, offsetting the additional wage cost.

Section C summary

Unpaid internships are lawful only in limited and clearly defined circumstances, such as mandatory UK student placements of limited duration, genuine volunteering for charities or tightly controlled observational experiences. Most unpaid internships in commercial organisations fail to meet these criteria. Employers who assume unpaid arrangements are permissible without careful analysis expose themselves to significant compliance and enforcement risk.

Section D: What employment rights can interns acquire?

Once an intern meets the legal definition of a worker or employee, statutory employment rights arise automatically. These rights are not dependent on job title, length of service or the informality of the arrangement. For employers, this is where internships can shift from a perceived low-risk engagement into a source of complex and costly liabilities.

A common compliance failure is focusing solely on pay, while overlooking the wider rights that attach once status is established. In practice, interns frequently acquire enforceable rights long before employers expect them to.

1. Worker rights that commonly apply to interns

Interns who qualify as workers are entitled to a core set of statutory protections. These include the right to be paid at least the National Minimum Wage, paid annual leave under the Working Time Regulations 1998, rest breaks and limits on working time.

Holiday entitlement is a particularly common area of non-compliance. Worker status triggers entitlement to 5.6 weeks’ paid holiday per year, pro-rated for the length of the engagement. Employers who fail to provide paid leave during the internship may face claims for accrued but untaken holiday pay at the end of the arrangement.

Workers are also protected against unlawful deductions from wages and discrimination under the Equality Act 2010. This means interns can bring claims relating to pay, working conditions and discriminatory treatment regardless of how short the internship was intended to be.

2. When interns may be classed as employees

In some cases, an intern will meet the higher threshold for employee status. This is more likely where the arrangement involves mutual obligations, defined hours, ongoing work and integration into the organisation. Where employee status applies, the intern acquires additional rights, including statutory notice and, subject to two years’ qualifying service, protection from unfair dismissal.

Although many internships are short, employers should not assume that employee rights cannot arise. Repeated extensions, rolling arrangements or the transition from intern to junior role without a clear contractual break can all contribute to an employee relationship being established.

From a risk perspective, employee status significantly increases exposure, particularly where an internship ends abruptly or without proper process.

3. Protection against discrimination and whistleblowing

Interns who qualify as workers or employees are protected against discrimination from day one. This includes protection from discrimination on grounds such as age, sex, race, disability and pregnancy.

Discrimination risk is heightened in internship contexts because interns are often younger, less experienced and more vulnerable to informal or inconsistent treatment. Informal arrangements do not shield employers from liability. In fact, lack of structure often increases the likelihood of claims.

Interns may also be protected as whistleblowers if they raise concerns about legal breaches, including National Minimum Wage compliance. Whistleblowing claims do not require a minimum length of service and can attract uncapped compensation.

4. Pension and other downstream obligations

In some circumstances, interns may trigger auto-enrolment obligations under workplace pension legislation. While short-term engagements may fall below earnings thresholds, employers should not assume that pension duties never apply. Where an intern is paid and meets age and earnings criteria, auto-enrolment considerations arise.

Other downstream risks include health and safety obligations, which apply regardless of status, and potential TUPE exposure in rare cases where interns are assigned to organised groupings of workers.

Many of these risks are overlooked at the outset but become significant once a dispute arises.

5. Why informality increases legal exposure

Many of the risks associated with intern rights arise because internships are often managed outside standard HR processes. Lack of written terms, unclear supervision arrangements and inconsistent treatment create evidential problems when disputes arise.

Where documentation is absent or poorly drafted, tribunals are more likely to infer obligations based on conduct. This often works against employers, particularly where interns are treated in practice like junior employees but denied formal recognition or rights.

Section D summary

Interns who qualify as workers or employees acquire statutory employment rights automatically, including paid holiday, discrimination protection and, in some cases, unfair dismissal rights. These rights arise regardless of the label attached to the role or the employer’s intentions. Informal internship arrangements significantly increase legal exposure and make disputes harder to defend.

Section E: How should employers structure a compliant internship?

For employers, the question is not whether internships can be useful, but how they can be structured in a way that delivers value without creating unnecessary legal exposure. A compliant internship requires deliberate design. Informal or ad hoc arrangements are the most common cause of breaches because they blur the line between learning and work, leaving status and obligations undefined.

From a governance perspective, internships should be approached in the same way as any other resourcing decision, with clarity on status, cost and risk before the arrangement begins.

1. Start with a clear classification decision

The first and most important step is deciding, at the outset, how the individual will be classified in law. Employers should assess whether the role is likely to amount to worker or employee status based on the reality of the tasks, supervision and expected contribution.

If the role involves set hours, assigned tasks and deliverables that benefit the organisation, it should be assumed that the intern will be a worker and must be paid. Attempting to engineer unpaid status around an inherently productive role is unlikely to be defensible and often results in retrospective liability.

Where the role cannot be structured to avoid worker status without artificial constraints, the compliant decision is to pay.

2. Use paid internships to reduce legal and operational risk

Paid internships are the safest and most predictable model for private sector employers. Paying the National Minimum Wage or above provides cost certainty, removes ambiguity around status and allows the employer to impose clear expectations around performance, attendance and conduct.

From a commercial perspective, paid internships also reduce the risk of enforcement action, reputational damage and internal inconsistency. They allow internships to be integrated into standard HR processes, including onboarding, supervision and exit management.

Employers should consider whether the perceived cost saving of unpaid arrangements is outweighed by the risk of back pay, penalties and management time if compliance issues arise.

3. Consider alternatives where an internship is not appropriate

In some cases, an internship may not be the most suitable or compliant option. Employers should consider whether alternative arrangements better align with their objectives and risk profile.

Fixed-term employment contracts can be an effective way to engage junior talent for a defined period while maintaining full compliance. Apprenticeships offer a structured, subsidised route to skills development with clear legal frameworks. Short-term work experience programmes, limited to observation, may be appropriate where genuine shadowing is the objective.

Each option carries different obligations and benefits, but all are generally easier to defend than an unpaid or loosely defined internship.

4. Put appropriate documentation in place

Even where an internship is paid and clearly structured, documentation remains critical. Written terms help define status, set expectations and reduce the scope for disputes. At a minimum, employers should document pay arrangements, working hours, supervision and the duration of the placement.

Where an intern is classed as a worker rather than an employee, documentation should reflect that distinction accurately. Misdescribing the relationship can undermine the employer’s position if a dispute arises.

Documentation should also address confidentiality, intellectual property and data protection, particularly where interns have access to sensitive information. Learning objectives should be documented separately from contractual obligations to avoid confusion between training and work.

5. Monitor and manage the arrangement in practice

Compliance does not end once the internship begins. Employers should monitor how the arrangement operates in reality and ensure it remains consistent with the original classification. Scope creep is a common problem, with interns gradually taking on more responsibility without corresponding changes to pay or status.

Regular review is particularly important where internships are extended or where interns transition into other roles. Clear break points and revised contracts reduce the risk of unintended employment rights accruing.

Section E summary

A compliant internship requires deliberate design, clear classification and appropriate documentation. Paid internships provide the greatest legal certainty for private sector employers, while unpaid arrangements should be used only where they clearly fall within narrow legal exemptions. Employers who treat internships as informal or low-risk engagements significantly increase their exposure to legal and operational risk.

Section F: What happens if an employer gets internships wrong?

The consequences of getting internships wrong extend well beyond having to correct a technical error. In the current enforcement climate, non-compliant internship arrangements can trigger financial penalties, retrospective liabilities and reputational damage that far exceed the perceived benefit of unpaid or informal labour.

For employers, the risk profile has changed. Internships are no longer an area where enforcement is rare or lenient. They are an established focus for regulators and a common source of claims by individuals once placements end.

1. HMRC enforcement and National Minimum Wage investigations

National Minimum Wage compliance is enforced by HMRC, not by employment tribunals. This significantly increases employer exposure. HMRC has wide-ranging powers to investigate suspected breaches, including the ability to demand records, interview staff and examine historic arrangements.

Where HMRC finds that interns should have been paid, it can require the employer to pay arrears going back up to six years. This applies even where the internship took place long ago and even where the intern initially accepted unpaid terms. Arrears are calculated by reference to the National Minimum Wage rate that applied at the time the work was performed.

In addition to arrears, HMRC can impose financial penalties of up to 200% of the underpayment, subject to statutory caps. These penalties are payable to the state and are separate from any back pay owed to the individual. HMRC may reduce penalties where employers make prompt voluntary disclosures and take corrective action, but mitigation should not be assumed.

2. Naming, shaming and reputational exposure

Employers found to have breached National Minimum Wage law may be publicly named by the government. Naming and shaming lists are published periodically and attract media attention, particularly where well-known brands or professional employers are involved.

For many organisations, reputational damage is the most significant consequence. Internship breaches are often framed publicly as exploitation of young or vulnerable workers, regardless of the employer’s intent. This can undermine employer brand, graduate recruitment efforts and stakeholder confidence.

Reputational exposure is particularly acute for organisations operating in regulated sectors or those reliant on public trust, investment or partnerships.

3. Employment tribunal claims and wider liabilities

In parallel with HMRC enforcement, interns may bring employment tribunal claims once their placement ends. Common claims include unlawful deductions from wages, holiday pay claims and discrimination claims. These claims can be brought even where the intern never intended to pursue legal action during the placement.

Where employee status is established, additional claims may arise, including unfair dismissal or failure to provide statutory notice. Whistleblowing claims may also be brought where interns have raised concerns about compliance issues.

Tribunal claims create management time, legal cost and internal disruption, even where the financial value of the claim is relatively modest.

4. Strategic and operational impact

Beyond direct legal consequences, non-compliant internships often expose broader weaknesses in governance and HR processes. Patterns of unpaid internships can suggest systemic failures in classification, record-keeping or wage compliance, increasing the likelihood of wider investigation.

HMRC increasingly undertakes sector-wide enforcement campaigns, particularly in industries where unpaid internships have historically been common. For growing businesses, enforcement action can also affect investment, due diligence and acquisition processes, as historic wage compliance is frequently scrutinised in commercial transactions.

5. Why prevention is commercially rational

From a commercial perspective, the cost of paying interns lawfully is almost always lower than the cumulative cost of enforcement action, arrears, penalties and reputational damage. Employers who proactively structure compliant internships benefit from predictability and reduced risk, while those who rely on informal practices face uncertain and escalating exposure.

Section F summary

Getting internships wrong can result in HMRC investigations, backdated wage liabilities, financial penalties and public naming. Interns may also bring tribunal claims, creating further cost and disruption. In the current enforcement environment, non-compliant internships represent a material legal and commercial risk rather than a low-level compliance issue.

FAQs: Hiring an intern – common employer questions

The following questions reflect the issues most commonly raised by employers when assessing internship arrangements. They are framed to address legal status, compliance risk and defensible decision-making.

1. Is an intern classed as an employee in UK law?

An intern is not automatically classed as an employee, but they may be classed as either a worker or an employee depending on how the relationship operates in practice. UK law does not recognise “intern” as a separate legal category. If the intern has mutual obligations, set hours and ongoing duties, employee status may arise. If they personally perform work for the organisation and the organisation benefits from that work, worker status is likely.

Importantly, status can change over time. An arrangement that begins as limited work experience may evolve into worker or employee status if duties, hours or expectations increase.

2. Can a private sector employer use unpaid interns?

In most cases, no. Unpaid internships in the private sector are lawful only in narrow circumstances, such as mandatory UK student placements of limited duration, genuine volunteering for charities or tightly limited observational work shadowing. Where an intern performs productive work or contributes to the business, they are likely to be a worker and must be paid at least the National Minimum Wage.

Most unpaid internships in commercial organisations are non-compliant and carry significant enforcement risk.

3. Does it matter if the intern agrees to work unpaid?

No. An intern’s consent has no legal effect if they meet the definition of a worker. National Minimum Wage rights cannot be waived, even where the individual actively wants the experience or signs an agreement confirming they will not be paid. Employers cannot contract out of statutory pay obligations.

4. How long can an unpaid internship last?

There is no lawful time limit that makes unpaid internships safe. Even very short placements can trigger National Minimum Wage entitlement if the individual is carrying out work. Duration is not a defence. The key issue is what the intern is doing and whether the employer derives benefit from their activities.

5. Are student interns exempt from being paid?

Only in limited cases. Students undertaking a placement that is a mandatory and assessed part of a UK-based course, and which does not exceed one year, may be exempt from National Minimum Wage requirements. Optional placements, summer internships and placements undertaken independently of course requirements are not exempt.

Students enrolled at overseas institutions are not covered by this exemption, even if they are temporarily studying or present in the UK.

6. Do interns accrue holiday pay?

If an intern is classed as a worker, they are entitled to paid annual leave under the Working Time Regulations 1998. Holiday accrues from day one and is pro-rated to reflect the length of the placement. Failure to provide paid leave can result in claims for accrued holiday pay at the end of the internship.

7. Can interns bring employment tribunal claims?

Yes. Interns who qualify as workers or employees can bring employment tribunal claims, including claims for unpaid wages, holiday pay and discrimination. Discrimination and whistleblowing claims do not require a minimum length of service and can be brought even where the internship was short or informal.

8. Do interns need written contracts?

While a written contract is not legally required to create employment or worker status, the absence of documentation significantly increases risk. Written terms help clarify status, pay, hours and expectations and make disputes easier to manage. Employers who rely on informal arrangements are more vulnerable if challenged.

9. Is paying interns always the safest option?

For private sector employers, paying interns is usually the lowest-risk option. Paid internships provide legal certainty, reduce enforcement exposure and allow clearer management of performance and conduct. The cost of compliance is typically far lower than the cost of arrears, penalties and reputational damage arising from non-compliance.

Conclusion

Hiring an intern is not a neutral or informal decision under UK employment law. It is a classification exercise with clear statutory consequences. The absence of a legal definition for “intern” does not create flexibility for employers; it increases risk by placing the burden on organisations to correctly assess status, pay entitlement and associated rights based on the reality of the arrangement.

For most private sector employers, the default assumption should be that an intern who performs work is a worker and must be paid at least the National Minimum Wage. Attempts to rely on unpaid arrangements without falling squarely within narrow legal exemptions expose employers to backdated liabilities, financial penalties and reputational harm. These risks are amplified by HMRC’s enforcement powers and the growing willingness of interns to challenge non-compliant practices.

A compliant approach to internships requires deliberate structuring, clear documentation and ongoing oversight. Employers who treat internships as part of their formal resourcing strategy, rather than as an informal extension of recruitment, are better placed to manage cost, protect reputation and avoid regulatory intervention. In practice, paying interns lawfully and integrating them into standard HR processes is not only safer, but often more commercially rational.

Glossary

Useful Links