Unsalaried positions – what’s the legal position

I was surprised when I opened up a popular law weekly magazine to find that a law firm was looking for “highly competent paralegals to work 3 days per week in an unsalaried position to progress to a full training contract and 2 years post qualification experience.” It seems as though, in the credit crunch, with fierce competition for each job vacancy, some organisations are looking for individuals who would be prepared to work free of charge with the promise of progress to a salaried position.

 However, such unsalaried positions may breach the requirements of the National Minimum Wage (NMW).

Most workers in the UK are entitled to the NMW and  employers may be breaking the law if they do not pay the statutory minimum amounts. The current rate of NMW is £5.80 per hour for workers aged 22 years and older. There is also a “developmental rate” of £4.83 per hour for workers aged 18 to 21 inclusive and £3.57 for workers under the age of 18 who are no longer of compulsory school age.

 As a general guideline, if you have a contract of employment you are an employee and therefore a worker for the purpose of the NMW rules. If you don’t have an employment contract you could still be a worker and entitled to receive the NMW if you do work personally for someone else.

 There are people who are not entitled to the national minimum wage and these include the self employed, volunteers and voluntary workers, work experience as part of education and higher education, certain apprentices, members of the armed forces, share fishermen and prisoners.

 It is important to note that just because you volunteer for a role, like the position I saw advertised, does not necessarily mean that you are not entitled to the NMW. If the arrangements under which you ‘volunteer’ effectively mean you have an employment or worker’s contract you may be entitled to the NMW.

It is understandable, in the current economic climate, that employers are looking at making cost savings, but employers should think carefully at whether the NMW applies.  If you are in any doubt as to whether the NMW applies to your voluntary, or other, workers, do not hesitate to contact us.