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The government has retreated from its manifesto promise to ban unpaid internships, opting instead for guidance and enforcement.
United Kingdom
Employment and HR
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The government has retreated from its manifesto promise
to ban unpaid internships, opting instead for guidance and
enforcement. We look at what this means for employers and why you
should review your internship arrangements now.
In July last year, we explored Labour’s commitment to ban
unpaid internships as part of its New Deal for Working People (see here). The government had pledged to
outlaw unpaid internships “except where they are part of an
education or training course”, framing the policy as central
to its social mobility agenda. Now, following the government’s
response to its Call for Evidence, the government’s next steps
are clearer, albeit more tentative than previously suggested.
What did Labour originally promise?
The manifesto commitment was clear: unpaid internships would be
banned unless they formed part of a formal educational or training
course.
Similarly, the policy rationale was straightforward: unpaid
internships disproportionately benefit those who can afford to work
for free – typically young people from more affluent backgrounds
with family support. Research from the Sutton Trust found that 61%
of internships undertaken by recent graduates were unpaid or
underpaid, and graduates from working-class backgrounds were less
likely to undertake an internship than their middle-class peers. A
ban, the argument went, would level the playing field and open up
opportunities in competitive industries to a broader range of
candidates.
What happened next?
In July 2025, rather than introducing legislation, the
government launched a Call for Evidence. Business Secretary
Jonathan Reynolds explained the aim was to gather information on
how unpaid internships affect young people and how businesses use
them to assess candidates. The Call for Evidence closed in October
2025, and the government published its response in late February
2026.
Is there going to be a ban?
In short, no—at least not for now. Instead, the
government’s response focuses on three alternative
measures:
Guidance: updating and expanding the
National Minimum Wage guidance so employers better comply with the
law and workers are better aware of their rights.
Enforcement: continuing to crackdown on
employers breaking the law through existing enforcement channels
and the Fair Work Agency (due to launch in April 2026).
Education and awareness: raising
awareness of workers’ rights through communications campaigns
to help young people understand their rights and what action they
can take if they are not being paid what they are legally entitled
to.
The government has not ruled out legislative change in the
future, stating it remains “committed to ensuring young people
have a fair chance at the start of their careers”.
Why has the government changed course?
The government has not explicitly explained why it departed from
its manifesto commitment. However, several factors are likely to
have influenced the decision:
Unintended consequences: the Call for
Evidence gathered views from businesses on how they use
internships, and some may have warned about unintended consequences
– for example, that a ban could lead employers to stop offering
work experience altogether rather than pay for it.
Definitional challenges: the term
“intern” has no legal meaning, and distinguishing between
lawful work experience, volunteering, and exploitative unpaid
internships is complex and would present drafting challenges.
Parliamentary time: with the raft of
changes and consultation currently taking place in relation to the
Employment Rights Act, the government may have concluded that a ban
was not the most efficient use of its legislative bandwidth.
What is the current legal position?
The crucial point is that there is already a risk to having
unpaid working interns. The absence of a statutory ban does not
mean that failing to pay interns is legal. Under existing law,
anyone who qualifies as an “employee” or
“worker” must be paid at least the National Minimum Wage.
The key question, therefore, is whether an intern meets the legal
definition of employee or worker.
A person is likely to be a worker if they are required to
perform work personally for the organisation, there is mutuality of
obligation (the employer must provide work and the individual must
do it), and there is some form of contract or arrangement between
the parties. This does not have to be a written contract and even
in circumstances where a contract is in place an individual could
be determined to be a worker.
So, in practice, if an intern turns up regularly, performs tasks
that benefit the business, follows instructions, and would face
consequences for not attending, they are very likely to be a worker
-regardless of what their arrangement is called. Labelling someone
an “intern” or “work experience student” does
not determine their legal status.
There may be genuine circumstances where an individual
undertaking work experience or an internship may lawfully remain
unpaid. For example, where the arrangement involves genuine work
shadowing, with the individual observing rather than performing
substantive work. That said, determining an intern’s employment
status can be a grey area in practice, and legal advice should be
sought in relation to any specific arrangements.
What does this mean for employers?
While the practical position for employers may not have
fundamentally changed, but the enforcement environment is about to
get tougher.
The Fair Work Agency will have powers to investigate National
Minimum Wage breaches and take action against non-compliant
employers. The government has indicated that the Agency will
“crack down” on unscrupulous employers, and we expect
interns to be a focus area given the policy attention this issue
has received. You can read more about this here.
What should you do now?
The absence of a new ban is not a green light for unpaid
internships: the legal risks remain and enforcement is set to
intensify.
For that reason, we would encourage employers to:
Review your internship arrangements. Do
you have unpaid interns or work experience placements? Assess
whether they genuinely can be unpaid. If they are doing productive
work that benefits the business, they may be entitled to pay.
Don’t rely on labels. Calling someone
an “intern”, “volunteer”, or “work
experience student” does not determine their legal status.
Tribunals will look at the reality of the arrangement. Carrying out
an audit will help demonstrate your rationale for any conclusions
you come to.
Check your documentation. Do your
internship agreements reflect the true nature of the arrangement?
Poorly drafted agreements can create ambiguity and risk.
Think about social mobility. Unpaid
internships may undermine efforts to attract diverse talent. Paying
interns opens up opportunities to candidates who cannot afford to
work for free.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.