Internships: A 2026 Employment Law Guide

Internships remain a common feature of UK workforce planning, particularly for employers seeking to attract early-career talent, test future hires or support skills development. However, internships also sit at the intersection of some of the most actively enforced areas of UK employment law, particularly around employment status and the National Minimum Wage. The legal risk for employers is often underestimated, largely because the term “intern” has no standalone meaning in law and offers no automatic protection from liability.

For HR professionals and business owners, the challenge is not whether internships are permitted, but how they are structured, classified and managed in a way that is legally defensible. Many enforcement actions by HMRC and successful employment tribunal claims arise not from deliberate non-compliance, but from poorly understood distinctions between interns, workers, employees and volunteers. In practice, what an employer calls an arrangement matters far less than what the individual is actually doing on a day-to-day basis.

Internships also carry reputational and commercial consequences beyond pure legal exposure. HMRC operates a public naming scheme for employers who breach National Minimum Wage rules, and unpaid internship practices increasingly attract media scrutiny and online criticism. At the same time, businesses must balance compliance with the legitimate commercial need to develop talent pipelines and offer meaningful early-career opportunities.

What this article is about
This article provides a comprehensive UK employment law guide to internships for HR professionals and business owners. It explains how internships are treated under UK law, when interns must be paid, when unpaid internships may be lawful and what employment rights can arise. It also sets out the key legal risks, common mistakes and practical steps employers should take to structure internships compliantly while protecting their business.

Section A: What Is an Internship Under UK Law?

UK employment law does not recognise “intern” as a standalone legal status. This is a critical starting point for employers, as many compliance failures arise from the mistaken belief that calling someone an intern changes their legal rights. In reality, internships are assessed under the same employment status framework that applies to all working arrangements, and the legal consequences flow from what the individual does, not the label applied to them.

In practice, an internship is simply a description used by employers to refer to a period of work experience, training or exposure to a workplace. It has no statutory definition and does not appear in employment legislation. As a result, an intern will fall into one of the existing legal categories recognised under UK law, most commonly as a worker or, less frequently, as an employee or a genuine volunteer.

The distinction matters because each status carries different legal rights and obligations. A worker is entitled to core protections such as the National Minimum Wage, paid annual leave and rest breaks. An employee benefits from the full range of employment rights, including statutory sick pay and family-related rights and, once qualifying service is met, protection from unfair dismissal. A genuine volunteer, by contrast, is not entitled to payment or employment rights, but this status is narrowly defined and frequently misunderstood.

When determining status, tribunals and enforcement bodies apply a reality-based test. In practice, employment status disputes are commonly determined by the employment tribunal, while HMRC focuses on worker status in the context of National Minimum Wage enforcement. Factors that are commonly considered include whether the individual is required to perform work personally, whether they are set tasks that contribute to the organisation’s output, whether there is an obligation to attend at certain times and whether the organisation derives a tangible benefit from the work performed. If these features are present, the individual is unlikely to be treated as a volunteer, regardless of how the role is described.

For employers, this means that internships should never be approached as a separate or informal category of engagement. They must be assessed with the same level of care as any other working arrangement. Early decisions around role design, supervision, working hours and expected outputs will heavily influence how the arrangement is classified if it is later scrutinised.

1. Section A summary

There is no legal status of “intern” under UK employment law. Interns are classified according to established employment status tests, and most will qualify as workers or employees based on the reality of their role. Employers who rely on labels rather than substance expose themselves to significant compliance risk from the outset.

Section B: Are Interns Entitled to the National Minimum Wage?

Whether an intern must be paid is one of the most common and highest-risk questions for UK employers. The starting point in law is that anyone who qualifies as a worker or employee is entitled to be paid at least the National Minimum Wage. Because many internships involve productive work and set expectations, a significant proportion of interns will meet the legal definition of a worker, regardless of how the role is described.

Under the National Minimum Wage Act 1998, a worker is someone who has a contract, whether written or implied, to perform work personally for another party that is not a client or customer of their own business. In the context of internships, this test is often satisfied where the intern is required to attend work at set times, carry out defined tasks and contribute to the organisation’s operations. Payment is not a deciding factor; unpaid arrangements can still create worker status if these elements are present.

Employers frequently assume that internships can be unpaid if they are short-term or primarily educational. This is a misconception. There is no general exemption from the National Minimum Wage based on the length of the placement or the fact that the individual is gaining experience. If the intern is doing real work that benefits the business, they will usually be entitled to the minimum wage for every hour worked.

HMRC, which enforces National Minimum Wage compliance, takes a strict approach to internships. Enforcement action often focuses on whether the work performed goes beyond simple observation or work shadowing. Interns who are answering emails, assisting clients, producing work output or covering tasks that would otherwise be done by paid staff are at high risk of being classified as workers for minimum wage purposes.

The financial consequences of getting this wrong can be significant. Employers may be required to pay wage arrears going back several years, face financial penalties of up to 200% of the underpayment and be publicly named under the government’s National Minimum Wage naming scheme. These risks apply regardless of whether the intern agreed to work unpaid or viewed the role as a valuable opportunity.

For HR professionals and business owners, the safest assumption is that interns should be paid unless a clear and specific exemption applies. Payment at or above the National Minimum Wage is often the most straightforward way to manage legal risk, particularly where the internship forms part of the organisation’s normal operations or talent pipeline.

1. Section B summary

Most interns will be entitled to the National Minimum Wage because they meet the legal definition of a worker or employee. Short duration, educational benefit or mutual agreement does not remove this entitlement. Employers should assume pay is required unless they can clearly justify a lawful exemption.

Section C: When Can Internships Be Unpaid Lawfully?

Although the default position is that interns must be paid, UK law recognises a limited number of circumstances in which an internship or placement may be unpaid without breaching National Minimum Wage rules. These situations are narrow and frequently misunderstood by employers, which is why unpaid internships are a common source of non-compliance.

One of the most commonly relied upon exemptions applies to students undertaking work placements that form an integral and assessed part of a UK-based further or higher education course. Where a placement is mandatory under the course requirements, the student may be exempt from National Minimum Wage entitlement. This exemption is time-limited. If a placement exceeds one year, the exemption will no longer apply and the student will become entitled to the minimum wage for any additional period worked.

It is important for employers to note that this exemption applies only to students currently enrolled on a qualifying UK course. It does not extend to graduates, individuals between courses or placements that are optional or arranged informally. Employers who assume that any “student internship” can be unpaid are at significant risk of breaching minimum wage law.

Another lawful category is genuine volunteering. Volunteer status is limited to charities, voluntary organisations and statutory bodies. A genuine volunteer must not receive payment other than reimbursement of reasonable expenses or limited benefits such as training. There must also be no obligation on either side: the volunteer must be free to attend or not attend, and the organisation must not depend on them to perform core functions. In a commercial business context, this exemption will almost never apply.

Work shadowing can also fall outside National Minimum Wage requirements where the individual is purely observing and not carrying out any productive work. This will usually be short-term in nature. As soon as the individual begins undertaking tasks, assisting staff or contributing to output, the arrangement is likely to fall within the definition of work and attract minimum wage entitlement.

Employers often rely on incorrect assumptions when justifying unpaid internships, including the belief that short duration, learning value or mutual agreement makes an arrangement lawful. None of these factors create an exemption under the National Minimum Wage regime. Where there is uncertainty, paying the National Minimum Wage is usually the lowest-risk and most defensible approach.

1. Section C summary

Unpaid internships are lawful only in limited and clearly defined circumstances, such as mandatory student placements forming part of a UK-based course or genuine volunteering in the voluntary sector. Most commercial internships will not qualify. Employers should treat unpaid arrangements as exceptional and ensure they can be legally justified.

Section D: Employment Rights and Legal Risks When Using Interns

Once an intern is classified as a worker or employee, a range of statutory employment rights arise automatically. These rights apply by operation of law and do not depend on whether the employer intended to create them or documented the arrangement formally. This is a common source of risk for employers who treat internships as informal or temporary arrangements.

Interns who qualify as workers are entitled to paid annual leave under the Working Time Regulations, rest breaks and limits on working time, as well as protection from unlawful deductions from wages. They are also protected under the Equality Act 2010, meaning they can bring discrimination and harassment claims from day one. These protections apply regardless of whether the internship is paid and are frequently engaged in practice.

In some cases, interns may qualify as employees rather than workers. This is more likely where the internship is longer-term, involves ongoing mutual obligations and closely resembles a standard role within the organisation. Employee status brings additional statutory rights, including statutory sick pay and family-related rights and, once the relevant qualifying service is met, protection from unfair dismissal. In most cases, unfair dismissal protection requires two years’ continuous service, although certain dismissals are automatically unfair and do not require a qualifying period.

Regulatory enforcement is a significant and increasing risk. HMRC has extensive powers to investigate suspected National Minimum Wage breaches and may require employers to provide records, explanations and witness evidence. Where breaches are identified, employers can be ordered to repay arrears, face financial penalties and be publicly named under the government’s enforcement regime. These outcomes can be particularly damaging for organisations that rely on brand reputation, recruitment appeal or public trust.

Internships also present broader commercial and reputational risks. Media coverage of unlawful or exploitative internship practices is increasingly common, and adverse publicity can undermine diversity, inclusion and early-career recruitment strategies. From a governance perspective, internships should be treated as part of the organisation’s workforce compliance framework, rather than as ad hoc or informal arrangements.

For HR professionals and business owners, the key risk lies not in offering internships, but in failing to manage them properly. Clear role design, accurate classification, lawful pay decisions and appropriate documentation significantly reduce the likelihood of disputes, enforcement action and reputational harm.

1. Section D summary

Interns who qualify as workers or employees acquire statutory employment rights, exposing employers to wage claims, discrimination complaints and regulatory enforcement. Informal or poorly structured internships significantly increase legal and reputational risk and should be avoided.

FAQs

1. Are internships legal in the UK?

Yes, internships are legal in the UK, but they must comply with employment and minimum wage law. There is no separate legal category for interns. The law looks at the reality of the arrangement to determine whether the intern is a worker or employee and therefore entitled to statutory rights.

2. Do interns have to be paid?

Most interns must be paid at least the National Minimum Wage because they meet the legal definition of a worker or employee. Unpaid internships are lawful only in limited circumstances, such as mandatory student placements forming part of a UK-based course or genuine volunteering in the voluntary sector.

3. Can a small business offer an unpaid internship?

Business size makes no difference under UK employment law. Small businesses are subject to the same National Minimum Wage and employment status rules as large employers. If an intern performs productive work, payment will usually be required.

4. How long can an unpaid internship last?

There is no lawful time limit that makes an unpaid internship acceptable. Even a short placement can attract National Minimum Wage entitlement if the individual is carrying out work rather than observing. Duration alone does not create an exemption.

5. Do interns count as employees?

Some interns may qualify as employees depending on the nature of the arrangement. Longer-term internships involving mutual obligations and defined roles are more likely to create employee status, bringing additional employment rights.

6. Can interns bring discrimination claims?

Yes. Interns are protected under the Equality Act 2010 from discrimination and harassment. These protections apply from day one, regardless of pay or contractual label.

7. What happens if HMRC investigates an internship?

HMRC can require employers to provide records, explanations and evidence relating to internship arrangements. If a breach of National Minimum Wage law is found, employers may be required to pay arrears, face financial penalties and be publicly named.

Conclusion

Internships can be a legitimate and valuable tool for UK employers, but they operate within a tightly regulated legal framework that leaves little scope for informality. The absence of a legal definition of “intern” means employers must focus on substance rather than labels and assess each arrangement against established employment status principles.

For most commercial organisations, the safest and most defensible approach is to assume that interns are workers and to pay at least the National Minimum Wage. Attempts to justify unpaid arrangements based on short duration, educational value or mutual agreement are rarely successful and frequently lead to enforcement action.

From a compliance perspective, internships should be designed with the same rigour as any other working arrangement. Clear role design, accurate classification, lawful pay decisions and appropriate documentation are essential. Where exemptions are relied upon, employers must be confident that the arrangement genuinely falls within a recognised category and that evidence exists to support that position.

A proactive, compliance-led approach allows HR professionals and business owners to develop early-career opportunities while protecting the business from financial penalties, regulatory action and reputational harm.

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