HMRC’s Crackdown: Are unpaid internships worth it?

Recent reports have surfaced exposing plans by HM Revenue & Customs to raid prominent fashion houses for ‘abuse’ of interns, in breach of minimum wage laws. Known for their use of interns as part of their workforce, the fashion industry faces significant damages to their labels if they are exposed for breaching working standards of an employee who is not contractually hired by the company.  Considering the long hours and irrelevant tasks assigned to interns, there seems to be a definite trade off by the employee; work hard and receive plenty. But realistically, are ‘priceless’ placements worth a lost salary for graduates?

HMRC plans to investigate powerful fashion houses as part of a wider-scale investigation, regarding recent changes in the law in minimum wage regulations. Prestigious labels such as Topshop, Vivienne Westwood and Urban Outfitters are all named companies that will be investigated by the recently formed ‘Dynamic Response’ unit in their use of interns on three, six and nine month programmes. Armed with a warrant that would traditionally breach business confidentiality policies, the unit will bear the power to question managers in detail and will even go through company accounts. Despite refuting claims that these work placements involve ‘shadowing’ an employee, the investigation by HMRC is in partner with a large scale operation to reinforce the rulings of minimum wage, based on hours of work and the position of the employer at the company.

Whilst this is considered extreme in normal circumstances, the contribution made by interns in the fashion industry is of great value. Journalists and stylists work around the clock to reach tight deadlines of presentations or collections themselves, but interns offer ‘an extra pair of hands’, ensuring the organisation of jobs such as photocopying, lunch-rounds, packing suitcases for photo-shoots and the cleaning and storage of clothes. In turn, interns gain unlimited access to the industry in their field of work, sitting in on buyers meetings and seeing the design process in the flesh. It is for these ‘valuable’ reasons, that HMRC are concerned about intern exploitation in the fashion industry.  The enthusiasm that lands graduates their placements is sometimes the mechanism used by companies to avoid paying them.

It is easy to argue why interns should be paid. Interns work a set amount of hours and contribute to the organisation of the company’s headquarters, just as much as a regular employee. Surely, if an intern applies for a job the same way an employee would, they should be paid for their efforts; equality is, after all, usually a priority within a company’s policy, particularly in such a diverse one as fashion.

For those looking for a career in fashion journalism, public relations or publishing, the investigation is considered both progress and a problem. Competition for internship is fierce; so much so that the numbers of places offered are next to non-existent. On one hand, the potential ruling for HMRC’s policy on paying interns is beneficial to graduates. Student’s fresh out of University would be able to take a year to search for a sustainable job, whilst gaining paid experience. Not many graduates are in a position to be able to work for free. Considering most of these placements are in company headquarters in London, travel expenses aren’t included in internships, leaving graduates with financial losses whilst working for free. However, if fashion houses are made to pay their interns, the competition to gain one of these placements will intensify dramatically, with more people applying for a shrinking number of places. Whilst the work that interns do at fashion houses is helpful to the company, too many of them are counter-productive, therefore reducing the number of paid intern positions.

Despite clear differences in company losses vs. graduate gain in this debate, it would see that HMRC’s inquiry is justified. The apparent ‘losses’ that a company would experience are no match for that which a graduate would suffer if made to work for free. Whilst the experience gained from an internship in the fashion industry is beneficial to one’s career, the age-old ‘money-can’t-buy’ thesis that fashion internships have been built on is in need of change. In wake of new minimum wage laws and the ever-shrinking economy, there is little justification why an intern shouldn’t be paid for their time at a company. What was once considered a ‘priceless opportunity’ needs to catch up with the rest of world’s flourishing industries and employ all interns with the same respect and regulations; including a sustainable salary.

Rosie Feenstra.

One Comment
  • nowayout
    4 December 2011 at 22:54
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    Yeah, lots of bloodly hell greedy employer to rip off poor people and poor students.Theyshouldput to hell or jail or fine or minipulation for employment contract.

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