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| Interns ‘forced to wait months’ for minimum wage inquiries | Interns ‘forced to wait months’ for minimum wage inquiries |
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| The government has been accused of “fobbing off” interns who complain about not being paid the minimum wage for proper work, with HM Revenue & Customs taking up to 14 months before it even questions employers. | The government has been accused of “fobbing off” interns who complain about not being paid the minimum wage for proper work, with HM Revenue & Customs taking up to 14 months before it even questions employers. |
| A series of cases examined by the Observer indicate that complainants have had to engage in sustained lobbying to force HMRC, which is responsible for enforcing the law, into properly examining their grievances. | A series of cases examined by the Observer indicate that complainants have had to engage in sustained lobbying to force HMRC, which is responsible for enforcing the law, into properly examining their grievances. |
| In the case of one London advertising firm, Shoreditch-based Don’t Panic, a former employee made his claim to HMRC in January 2014, but said he was told that, because of a backlog, it would be months before an investigation would start. The complainant then had to repeatedly chase officials when promises that someone would be in touch to take further details were not kept. It was only in March of this year that HMRC informed the complainant that it had begun its investigation. | In the case of one London advertising firm, Shoreditch-based Don’t Panic, a former employee made his claim to HMRC in January 2014, but said he was told that, because of a backlog, it would be months before an investigation would start. The complainant then had to repeatedly chase officials when promises that someone would be in touch to take further details were not kept. It was only in March of this year that HMRC informed the complainant that it had begun its investigation. |
| When contacted by the Observer, Kim Garrett, office manager at Don’t Panic – whose work includes government advertising campaigns – confirmed that there was now “an ongoing investigation relating to a single employee, who left before my time, under a bit of a cloud”. | When contacted by the Observer, Kim Garrett, office manager at Don’t Panic – whose work includes government advertising campaigns – confirmed that there was now “an ongoing investigation relating to a single employee, who left before my time, under a bit of a cloud”. |
| She added: “I don’t think we can go into the details as the case is still ongoing. What I can say is that, as a company, we strongly believe in the national minimum wage and our intention is always to comply with HMRC guidelines.” | She added: “I don’t think we can go into the details as the case is still ongoing. What I can say is that, as a company, we strongly believe in the national minimum wage and our intention is always to comply with HMRC guidelines.” |
| Under the law, anyone who is “working” must be paid the national minimum wage – which is £6.50 an hour for anyone aged 22 or over. | Under the law, anyone who is “working” must be paid the national minimum wage – which is £6.50 an hour for anyone aged 22 or over. |
| Mark Watson, a television director who runs a campaign set on to exposing poor work-experience practices, said he had spent two years attempting to interest HMRC in the cases of hundreds of people who were designated as being on work experience, but worked set hours as ushers on major TV shows such as Britain’s Got Talent. | Mark Watson, a television director who runs a campaign set on to exposing poor work-experience practices, said he had spent two years attempting to interest HMRC in the cases of hundreds of people who were designated as being on work experience, but worked set hours as ushers on major TV shows such as Britain’s Got Talent. |
| As of February this year, HMRC told him that they were still taking witness statements, but Watson said he had had to lobby them hard to even carry out these inquiries. Watson said he believed that one major obstacle for interns was that HMRC appeared to have changed its policy towards them, a claim denied by officials. | As of February this year, HMRC told him that they were still taking witness statements, but Watson said he had had to lobby them hard to even carry out these inquiries. Watson said he believed that one major obstacle for interns was that HMRC appeared to have changed its policy towards them, a claim denied by officials. |
| In 2011, Emily Wong, then 23, received back pay for the set hours of work she did as an unpaid intern in the press department at Philip Green’s Arcadia retail empire. | In 2011, Emily Wong, then 23, received back pay for the set hours of work she did as an unpaid intern in the press department at Philip Green’s Arcadia retail empire. |
| However, in the recently published 2015 annual report of the Low Pay Commission, a body established by a Labour government in 2009, Watson is reported as suggesting that, since then, “there had been a noticeable policy shift at HMRC, whereby it would not consider complaints from interns where the individual concerned (who was working set hours and had regular duties) had known from the start that the position was unpaid and they had received no payment since starting the post”. In response, the commission wrote that while HMRC denied that such a policy change had occurred, it was a concern and there was a need for clarity. It argued that there was a danger that the cases of unpaid interns would be “deprioritised” if HMRC was focusing only on cases where at least some money was paid. | However, in the recently published 2015 annual report of the Low Pay Commission, a body established by a Labour government in 2009, Watson is reported as suggesting that, since then, “there had been a noticeable policy shift at HMRC, whereby it would not consider complaints from interns where the individual concerned (who was working set hours and had regular duties) had known from the start that the position was unpaid and they had received no payment since starting the post”. In response, the commission wrote that while HMRC denied that such a policy change had occurred, it was a concern and there was a need for clarity. It argued that there was a danger that the cases of unpaid interns would be “deprioritised” if HMRC was focusing only on cases where at least some money was paid. |
| It reported: “Subsequent advice we received from HMRC was that it had not changed its policy. The absence of any payments made would just be one of a number of factors that would be taken into consideration when assessing an individual’s entitlement to NMW. So the absence of pay should not in itself mean a case would not be pursued. | It reported: “Subsequent advice we received from HMRC was that it had not changed its policy. The absence of any payments made would just be one of a number of factors that would be taken into consideration when assessing an individual’s entitlement to NMW. So the absence of pay should not in itself mean a case would not be pursued. |
| “This is a facet of the NMW that remains poorly understood. Moreover, because the harm of an agreement to work unpaid is borne by candidates unable to take up a role rather than just the worker concerned, there is a risk such cases will get deprioritised in an enforcement model that is focused on recovering lost wages.” | “This is a facet of the NMW that remains poorly understood. Moreover, because the harm of an agreement to work unpaid is borne by candidates unable to take up a role rather than just the worker concerned, there is a risk such cases will get deprioritised in an enforcement model that is focused on recovering lost wages.” |
| Tanya de Grunwald, whose website Graduate Fog has been investigating the failure of HMRC to act effectively on cases involving interns, said interns were in despair. “By fobbing off these complainants” she said, “HMRC is failing in its duty of care to these vulnerable workers, and to others who are not in a position to complain because, for example, they need a reference.” | Tanya de Grunwald, whose website Graduate Fog has been investigating the failure of HMRC to act effectively on cases involving interns, said interns were in despair. “By fobbing off these complainants” she said, “HMRC is failing in its duty of care to these vulnerable workers, and to others who are not in a position to complain because, for example, they need a reference.” |
| An HMRC spokesman said: “An intern’s minimum wage entitlement is linked to their employment status. This is a complex area of law and much depends on the details of the agreement the individual has with the company.” | An HMRC spokesman said: “An intern’s minimum wage entitlement is linked to their employment status. This is a complex area of law and much depends on the details of the agreement the individual has with the company.” |
| CASE STUDY | |
| About 40 people who did work experience with Applause Store Productions, which provides ushers and crowd control for hit shows such as Britain’s Got Talent and The X Factor, are said to have raised concerns with campaigners about not being paid the national minimum wage after working days lasting from 10am to 8pm. | |
| HMRC was alerted to the sitution two years ago by Mark Watson, a TV director. Emails seen by this newspaper show that officials were still taking witness statements in February this year. One complainant told Watson: “I had to wear their uniform and basically carry out the exact same role a worker would … They did not even pay expenses.” | |
| Mathew Firsht, chief executive of Applause, said those on work experience were brought in to “shadow” audience managers and that more than 200 had subsequently received paid work. | |
| “The sessions mentioned are for a maximum of three shows,” he said. “There have been no inquiries from HMRC and/or complaint allegations about this subject. I am not at liberty to inform you of any company audits [by HMRC], but what I can say is that we proudly comply, and always have done, with all current employment law.” | |
| HMRC declined to comment. |