Scottish agencies are risking £30,000 fines by allowing graduates to carry out work experience with no, or very low, pay.
An informal survey carried out by The Drum found that few agencies knew there was legislation covering work experience.
Under the Minimum Wage legislation anyone doing work experience independent from or after completion of a vocational qualification is entitled to be paid minimum wage, regardless of whether they offer to work [for experience] for free. Students who are studying on higher education courses which have work experience accredited as a part of their course need not be paid minimum wage, but if their course has finished and they look for experience the national minimum wage rate applies.
Many agencies are also close to flouting the little-known regulation by paying just less than minimum wage. The rate (for workers aged 22 and over) is currently £4.85 an hour, working out at around £169.75 for an average 35-hour week. Many agencies pay between £100 and £150 a week.
A spokesperson for the Department of Trade and Industry confirmed that work experience staff are not exempt from the legislation. “Unless the person is carrying out work experience as part of a higher education course, the minimum wage applies,” she said. There are six potential offenses which companies can be found guilty of; each carries a £5,000 fine.
David Reid, MD of 1576, said he didn’t realise work experience was covered under minimum wage, but said; “We’ve always paid people, because I don’t think morally you should have people working for nothing. I think everyone has a cost of living whether they’re working full-time or not.”
Phil Adams, MD at The Leith and chairman of the Scottish IPA confirmed that he was aware of the legislation, but only because they have a dedicated HR manager. He fears smaller agencies could be at risk.
He said: “If you have a smaller agency, where perhaps there isn’t a dedicated HR person, the chance to get caught out is much greater. IPA guidelines state that any placement that’s at your agency for more than two weeks should be paid the minimum wage and preferably be on a fixed-term contract. It should mean that they get to do real work and also allows them to work the benefits system properly.”