Over 100 fashion houses who exhibited their clothes during London Fashion Week in September have been sent cautionary letters from the HMRC.

The letters warned against the use of “interns” as “employees” without appropriate pay.

The HMRC has said that the fashion houses have been given ample warning by the receipt of these letters and they should now be well aware that not paying the national minimum wage to those who deserve it simply is not going to work. The letters are hoped to have the effect of making the fashion houses put things right in order to avoid possible fines and/ or prosecution.

In order to ensure that the right thing is being done for the interns the HMRC plan on carrying out compliance checks in the new year. If they do find cases where an intern should in fact be getting paid for their work a financial penalty will be issued alongside a notice  to the intern themselves about the fact tat they have been underpaid. The notice will require that the intern is paid and that this is backdated to when they first started working for the fashion house.

This is a problem which has been occurring in various sectors of the economy and one which Deputy Prime Minister, Nick Clegg, has not been happy about. He commented “I strongly urge fashion houses and designer labels to make sure they are treating interns fairly”. He went on to explain that an interns should be paid when they undertake work which is worthy of the national minimum wage and that internships should serve as a valuable method of opening doors into a career, which must be available to everyone, not just those who can afford to work for nothing. This last part of the comment is something we have heard before in relation to interns working for free and then gaining a foot in that unfortunately is not always open to those from poorer backgrounds.

Nick Clegg also advised those who did use interns should take part in the “Business Compact” scheme. The scheme aims to ensure that businesses make a commitment to the reform of their internships to ensure that they are providing the same kinds of opportunities to hopefuls from all walks of life.

The Business Compact is part of the coalition government's social mobility plans. It aims to remove barriers to success particularly those which exist only for the poorer. It calls for people to partake in mentoring schemes and to advertise work experience. Nick Clegg speaks proudly of the scheme and said: “The fact is, workplaces across Britain desperately need to be opened up. Too often it’s who you know, not what you know, that counts. That’s why, as part of the Social Mobility Strategy, we have set up a Business Compact which commits businesses to opening their doors to give people the break they need. The principles behind the compact are simple: fairness, opportunity, investing a little more time in the next generation – your future workforce”.

Those taking advantage of people who will do anything to get valuable work experience should be warned that this is something the government hopes to crack down on and the penalties could be quite severe if it continues. As part of its push towards social mobility the government views unpaid internships as adverse to those not in a position to work months on end without pay and as such is not something which will be tolerated in the future.