In July last year, we explored Labour's commitment to ban unpaid internships as part of its New Deal for Working People (see here). The government had pledged to outlaw unpaid internships "except where they are part of an education or training course", framing the policy as central to its social mobility agenda. Now, following the government's response to its Call for Evidence, the government's next steps are clearer, albeit more tentative than previously suggested.

What did Labour originally promise?

The manifesto commitment was clear: unpaid internships would be banned unless they formed part of a formal educational or training course.

Similarly, the policy rationale was straightforward: unpaid internships disproportionately benefit those who can afford to work for free - typically young people from more affluent backgrounds with family support. Research from the Sutton Trust found that 61% of internships undertaken by recent graduates were unpaid or underpaid, and graduates from working-class backgrounds were less likely to undertake an internship than their middle-class peers. A ban, the argument went, would level the playing field and open up opportunities in competitive industries to a broader range of candidates.

What happened next?

In July 2025, rather than introducing legislation, the government launched a Call for Evidence. Business Secretary Jonathan Reynolds explained the aim was to gather information on how unpaid internships affect young people and how businesses use them to assess candidates. The Call for Evidence closed in October 2025, and the government published its response in late February 2026.

Is there going to be a ban?

In short, no—at least not for now. Instead, the government’s response focuses on three alternative measures:

• Guidance: updating and expanding the National Minimum Wage guidance so employers better comply with the law and workers are better aware of their rights.
• Enforcement: continuing to crackdown on employers breaking the law through existing enforcement channels and the Fair Work Agency (due to launch in April 2026).
• Education and awareness: raising awareness of workers’ rights through communications campaigns to help young people understand their rights and what action they can take if they are not being paid what they are legally entitled to.

The government has not ruled out legislative change in the future, stating it remains "committed to ensuring young people have a fair chance at the start of their careers".

Why has the government changed course?

The government has not explicitly explained why it departed from its manifesto commitment. However, several factors are likely to have influenced the decision:

• Unintended consequences: the Call for Evidence gathered views from businesses on how they use internships, and some may have warned about unintended consequences - for example, that a ban could lead employers to stop offering work experience altogether rather than pay for it.
• Definitional challenges: the term "intern" has no legal meaning, and distinguishing between lawful work experience, volunteering, and exploitative unpaid internships is complex and would present drafting challenges.
• Parliamentary time: with the raft of changes and consultation currently taking place in relation to the Employment Rights Act, the government may have concluded that a ban was not the most efficient use of its legislative bandwidth.

What is the current legal position?

The crucial point is that there is already a risk to having unpaid working interns. The absence of a statutory ban does not mean that failing to pay interns is legal. Under existing law, anyone who qualifies as an “employee” or "worker" must be paid at least the National Minimum Wage. The key question, therefore, is whether an intern meets the legal definition of employee or worker.

A person is likely to be a worker if they are required to perform work personally for the organisation, there is mutuality of obligation (the employer must provide work and the individual must do it), and there is some form of contract or arrangement between the parties. This does not have to be a written contract and even in circumstances where a contract is in place an individual could be determined to be a worker.

So, in practice, if an intern turns up regularly, performs tasks that benefit the business, follows instructions, and would face consequences for not attending, they are very likely to be a worker -regardless of what their arrangement is called. Labelling someone an "intern" or "work experience student" does not determine their legal status.

There may be genuine circumstances where an individual undertaking work experience or an internship may lawfully remain unpaid. For example, where the arrangement involves genuine work shadowing, with the individual observing rather than performing substantive work. That said, determining an intern's employment status can be a grey area in practice, and legal advice should be sought in relation to any specific arrangements.

What does this mean for employers?

While the practical position for employers may not have fundamentally changed, but the enforcement environment is about to get tougher.

The Fair Work Agency will have powers to investigate National Minimum Wage breaches and take action against non-compliant employers. The government has indicated that the Agency will "crack down" on unscrupulous employers, and we expect interns to be a focus area given the policy attention this issue has received. You can read more about this here.

What should you do now?

The absence of a new ban is not a green light for unpaid internships: the legal risks remain and enforcement is set to intensify.

For that reason, we would encourage employers to:

• Review your internship arrangements. Do you have unpaid interns or work experience placements? Assess whether they genuinely can be unpaid. If they are doing productive work that benefits the business, they may be entitled to pay.
• Don't rely on labels. Calling someone an "intern", "volunteer", or "work experience student" does not determine their legal status. Tribunals will look at the reality of the arrangement. Carrying out an audit will help demonstrate your rationale for any conclusions you come to.
• Check your documentation. Do your internship agreements reflect the true nature of the arrangement? Poorly drafted agreements can create ambiguity and risk.
• Think about social mobility. Unpaid internships may undermine efforts to attract diverse talent. Paying interns opens up opportunities to candidates who cannot afford to work for free.

If you would like to discuss your internship arrangements or need help reviewing your documentation, please get in touch with your usual Lewis Silkin contact.