The UK government is launching a new initiative to crack down on companies that offer unpaid internships.

HM Revenue & Customs will be sending over 550 warning letters to companies mainly in the performing arts and law and accountancy firms, which have a reputation for using unpaid interns.

“Employing unpaid interns as workers to avoid paying the national minimum wage is against the law and exploitative. No one should feel like they have to work for free to get the skills and experience they need to get ahead,” said Andrew Griffith, the business minister.

“That’s why over the last three months, government enforcement teams have been targeting employers advertising for unpaid interns, reminding them of the law and the consequences of breaking it.”

According to the Sutton Trust social mobility charity, 10,000 graduates spend at least six months in an internship following university – a fifth of these are unpaid.

Although unpaid internships had recently become illegal, the government has admitted it is yet to prosecute any companies. The HMRC hope to introduce tougher laws for those continuing to do so.

The founder and chair of the Sutton Trust, Sir Peter Lampl, highlighted how unpaid internships means they were often out of reach to many families on lower incomes. 

“Unpaid internships remain a serious barrier to social mobility so any move to crack down on employers who continue to take them on should be welcomed. But little is likely to change until legislation around internships is made clearer,” he said.

“Many employers either remain unaware that their interns should be paid, or are choosing to exploit the lack of clarity in the law – through work shadowing placements, for example – to avoid paying their interns.

“It’s clear that the current law is not working – at the end of 2017 there were no prosecutions in relation to interns and pay, yet tens of thousands of young people continue to work for free. We want to see tighter legislation so that all internships are paid at least the national minimum wage, fairly advertised and awarded on merit.”

According to the new law, interns are now classed as workers, who sign a contract. They must be paid at least the National Minimum Wage or the National Living Wage.

Genuine volunteers in the workplace do not need to be paid.