Labour’s Proposed Ban on Unpaid Internships

The Labour Government recently announced its intention to ban unpaid internships in the workplace. This proposal forms part of the Government’s “Plan to Make Work Pay,” aimed at tackling inequality, promoting social mobility, and ensuring fair compensation for all workers.

The Government launched a formal call for evidence on the 17th July 2025, seeking the public’s views on unpaid internships and other roles that fall below the National Minimum Wage. This ‘Call for Evidence’ closes on the 9th October 2025.

Currently, there is no legal definition of “internship” or “work experience” under the law in England and Wales. Individuals working as ‘interns’ may be classified as an employee, worker, or volunteer, each with different rights and entitlements. The most significant implication being that only workers and employees are entitled to the national minimum wage.

Interns who perform work or services regularly may be considered workers, thereby making them entitled to the National Minimum Wage. However, if individuals are merely work shadowing, (i.e. observing without performing tasks), this does not attract National Minimum Wage entitlement.

Labour’s proposed ban would prohibit unpaid internships except where they are part of an educational or training course. While the precise definition of “internship” is yet to be clarified, the government is particularly concerned about the prevalence of unpaid roles that may be misclassified, leading to non-compliance with wage laws.

What Might the Ban Look Like?

Several models are under consideration:

• Total ban: this would only include narrow exceptions for education linked placements
• Duration based ban: this would limit unpaid internships to a set period to comply with the new law, for example a four week limit could be implemented. This would be similar to Germany’s rule requiring payment for internships longer than three months

Enforcement

Historically, enforcement of National Minimum Wage breaches in internships has been limited. Interns are often reluctant to report breaches due to the desire to secure future employment, putting them in a vulnerable position. One means of addressing this could be the creating of the Fair Work Agency, a new state enforcement body which is proposed under the Employment Rights Bill.

The Fair Work Agency would include some of the Government’s existing enforcement functions, including HMRC’s National Minimum Wage team, and would have powers to:

• Inspect workplaces and seize documents
• Issue underpayment notices with penalties up to 200% of the unpaid amount, capped at £20,000 per individual
• Bring tribunal proceedings on behalf of workers and recover enforcement costs from
  non-compliant employers

Next Steps

To prepare for the upcoming changes, employers should audit all work experience or intern placements to assess legal compliance. Employers should take care when offering unpaid placements as the analysis of an intern’s status from an employment perspective (and entitlement to pay) can be a grey area. Therefore, we recommend taking legal advice on the specific day to day arrangements in place, as well as the duties they would be required to perform, before going ahead.

If you have queries or questions in relation to the internships or work experience placements, please do not hesitate to contact a member of the AfterAthena team (part of the Napthens Group) who are able to offer 30 minutes of free advice to QCS members.