Most graduate internships ‘are unpaid or underpaid’

Many employers could be breaking the law by not paying interns properly.

A study by Sutton Trust found that 61% of internships undertaken by recent graduates were either unpaid or underpaid.

Figures showed that:

almost one in four were paid less than the minimum wage
nearly one in five came with expenses only
just over one in five had no compensation at all

Since interns are legally entitled to the national minimum wage (NMW), the Sutton Trust believes many current internships are “likely illegal under existing regulations”.

However, it said many employers aren't being punished because of confusion over the law and a lack of enforcement.

In addition, the trust stated that the system relies on interns reporting non-paying employers themselves.

Nick Harrison, chief executive of the Sutton Trust, described the current situation as “shocking”, as internships are “an increasingly critical route into the best jobs”.

“They should be ashamed,” he commented.

“The government has pledged to ban unpaid internships, which is absolutely the right thing to do.”

Banning unpaid internships ‘will level playing field’

Another issue is that middle class graduates were found to be more likely to complete an unpaid or underpaid internship than those from working class backgrounds.

This is significant as those from more affluent backgrounds often have more of a financial safety net to fall back on.

Figures showed that graduates who undertook unpaid internships could only do so because they:

received money from parents - 40%
lived at home or with family or friends for free - 39%
used savings - 29%

“Clearly not all young people can get support from the bank of mum and dad,” Mr Harrison commented.

“So banning this outdated practice will help to level the playing field for these valuable opportunities.

“It’s a no brainer and should be implemented without delay."

Internships not openly advertised

Graduates from less affluent backgrounds also face the obstacle of most internships not being openly advertised.

Almost 20% of internships were found through family and friends in an organisation.

That compares with just 11% being found through an advert.

The Sutton Trust believes this means that working class graduates and those with “less social capital” aren’t as likely to access internships via networks.

“There’s a whole lot more that employers must do to make sure they’re accessing a wider pool of talent, such as advertising internship opportunities rather than taking in family and friends of their existing staff or biggest customers,” Mr Harrison said.