Making Work Pay: Why the Government’s Call for Evidence on Unpaid Internships Matters for Small and Scaling Businesses

opekoshemani
Sep 14
3 min read

Updated: Nov 4

The government has launched a call for evidence on unpaid internships and related roles as part of its Plan for Change, which aims to ban unpaid internships unless they are explicitly part of an educational or training course. The consultation is open until 9 October 2025, and this is a crucial opportunity for small and scaling businesses to have their say.

For many small and growing businesses, interns and work trials are a lifeline. They provide extra capacity, fresh ideas, and a pipeline of future talent. However, they can also create risks if not handled correctly.

Understanding the Terms Under Review

The government is gathering evidence on five areas, including:

Internships – Short-term work placements (days, weeks, or months) undertaken by individuals looking to gain relevant skills. Internships may involve tasks similar to those performed by paid employees. If they meet the definition of a “worker,” they must be paid at least the NMW. The main exception is for students on a mandatory placement as part of a course (up to one year).
Work trials – Tasks given during a recruitment exercise to assess a candidate’s suitability for the role. If the trial lasts more than a few hours or benefits the business beyond simply testing for suitability, NMW is likely due. The longer the trial period continues, the more likely it is that it results in a contract to provide work, and NMW becomes due.
Voluntary workers – Usually within charities or voluntary organisations. Voluntary workers must not receive payment other than reimbursement of reasonable expenses.
Volunteers – Individuals who give their time freely, with no contractual obligation to perform duties. They are not entitled to NMW.
Work shadowing – Observation only, with no productive work done. No NMW entitlement if it stays purely observational.

Why This Matters for Small & Scaling Businesses

Internships and trials can be a lifeline for growing businesses. They help boost capacity, bring in fresh ideas, and build talent pipelines. For interns, these opportunities can be invaluable stepping stones to future roles, helping them expand their network and skill set. However, they can also carry risks if they aren’t structured correctly.

Legal risk: Misclassifying someone as an unpaid intern when they should be paid can lead to penalties and reputational damage.
Budget impact: If unpaid internships are banned, you may need to factor NMW into your workforce planning.
Talent strategy: Structured, fairly paid internships can improve your employer brand and attract better candidates.

What Employers Should Do

Review your arrangements: Check how interns, trial workers, and volunteers are classified in your organisation.
Ensure compliance: Make sure anyone meeting the definition of “worker” is paid at least the NMW.
Gather evidence: Collect data on how many interns or trials you host, whether they are paid, and for how long.
Respond to the consultation: Share your experiences and recommendations via the government’s official channels by 9 October 2025.

Have Your Say

Responses are especially encouraged from SMEs and scaling businesses. Your feedback will help shape the final rules expected in early 2026. You can respond via Making Work Pay: Call for evidence on unpaid internships.

This is a great opportunity to shape policy that could have a direct impact on how you attract and develop future talent while protecting your business from compliance risk.

Take Action Now

Before submitting your views, review your current arrangements:

Are you paying interns correctly?
Are work trials kept short and genuinely about testing suitability?
Do your volunteer arrangements meet the legal criteria?

Protean HR helps mitigate risk for growing businesses by auditing employment practices and recommending compliant, inclusive frameworks—protecting both companies and employees and workers from legal pitfalls.

Conclusion

In conclusion, the call for evidence on unpaid internships is an important step for small and medium-sized businesses. It provides a platform for employers to voice their opinions and experiences. Engaging in this consultation is crucial for shaping future policies that affect the workforce. By participating, you can help ensure that the rules support both businesses and the individuals they aim to nurture.

For further support or advice on employment law compliance, contact Protean HR today.