Employment: Bosses 'breaking law with unpaid interns'

Think-tank the Institute for Public Policy Research (IPPR) and campaign group Internocracy said firms mistakenly believed they were allowed to take on unpaid interns as long as both sides knew it was a voluntary position.

Unpaid internships are common in politics, media and the fashion industry, but many companies offer expenses-only positions which cannot be described as work experience, said the report.

Surveys have suggested that one in five employers pays no money at all to interns, while half offer at least the national minimum wage.

Kayte Lawton, research fellow at the IPPR, said: "There is a mistaken belief that employers can take on people on a voluntary basis if both sides agree – but that's not what the law says. If an intern is doing work for a company, then they need to be paid – it's as simple as that.

"In practice, this isn't what happens because employers don't understand the law and enforcement agencies are turning a blind eye. This is a real shame for all those hugely talented young people who can't rely on their parents to fund an unpaid internship."

Dominic Potter, director of Internocracy, said: "We now have entire industries that rely on the willingness of young people to work for free. In the long run this is bad for business because it damages the reputation of these industries and makes it difficult for them to recruit from the broadest pool of talent."