Monday, 28 June 2010

Training Wages

Monday 28th June 2010

CIPD policy paper calls for an end to unpaid internships for University students with the introduction of a new 'Training Wage'

An introduction of a £2.50 an hour 'Training Wage' is being called for by the Chartered Institute of Personnel and Development on the day that internship schemes for recently graduated students begin across the country.

With CIPD research showing that over a third (37%) of internships are currently unpaid, Internships: To Pay or not To Pay? proposes that all interns are paid a guaranteed minimum wage. It argues that a new 'Training Wage' would help reflect the contribution that an intern is likely to make to an organisation, as well as promote social mobility through encouraging people from poorer backgrounds to apply.

The proposed Training Wage of £2.50 an hour - which is the current minimum rate of pay for apprentices - would be introduced under the plans, to cover all interns and apprentices regardless of their occupation or industry sector. Any position that is advertised as an internship would automatically trigger a legal obligation on the part of the employer to pay at least the Training Wage throughout the entire duration of the internship, helping to reduce complexity surrounding the issue of payment for young people and also support better enforcement arrangements.

Other recommendations in the policy paper include:
• A new code of best practice, building on the CIPD's Internships That Work: A guide for employers (published in 2009), should be widely disseminated to employers to help improve the quality of programmes offered to young people
• Consideration should be given to the working rights, for example sick pay, that interns should be entitled to
• Discussions should take place regarding the possibility of having regional pay variations to reflect different living costs in certain parts of the country

Tom Richmond, Skills Adviser at the CIPD, says: "The continued existence of a major loophole in the national minimum wage legislation has created a lot of confusion and concern around the issue of whether interns should be paid or not. We believe that the introduction of this Training Wage would reflect the contribution that interns make to their organisations, which is likely to be less than that of a fully-trained member of staff, at the same time as avoiding concerns over reductions in the number of internship opportunities that may result from all interns being paid the full minimum wage.

"Alongside the introduction of the Training Wage, a number of related issues would also need to be discussed, including which working rights interns should be entitled to. Nevertheless, the creation of the Training Wage would represent a significant step towards ensuring that internships promote social mobility, provide young people with valuable experience and help tackle exploitation in the workplace. What's more, organisations would still be able to recruit young talent at a reasonable rate during this difficult economic period and beyond."

Source CIPD