Unpaid work trials are common in some sectors where there is high turnover of staff (e.g. hospitality, retail) as they can be an effective way to find out if a job applicant can do the work you need doing. However, unpaid work trials raise the tricky question of whether the applicant should be paid while they are on the ‘trial’?
Minimum wage legislation says that anyone defined as a ‘Worker’ (Employees, Agency Workers, Casual Hours and Zero Hours contract workers) must be paid at least the national minimum/living wage (if they are above compulsory school leaving age) – you can read more here.
There is a small list of people who are excluded from this legislation, meaning they do not need to be paid the national minimum wage, who are:
- self-employed people running their own business
- company directors
- volunteers or voluntary workers
- workers on a government employment programme, such as the Work Programme
- members of the armed forces
- family members of the employer living in the employer’s home
- non-family members living in the employer’s home who share in the work and leisure activities, are treated as one of the family and are not charged for meals or accommodation, for example au pairs
- workers younger than school leaving age (usually 16)
- higher and further education students on a work placement up to 1 year
- workers on government pre-apprenticeships schemes
- people on the following European Union programmes: Leonardo da Vinci, Youth in Action, Erasmus, Comenius
- people working on a Jobcentre Plus Work trial for 6 weeks
- share fishermen
- people living and working in a religious community.
You can read Government advice on minimum wage legislation here.
However, a myth persists that people undertaking work trials can always be unpaid! At the end of 2018 the Government issued advice to employers about when unpaid work trials can be used as part of the recruitment process, which you can read here.
In the UK Parliament in February 2019 there was a call from a number of MP’s to crackdown on the use of these trial shifts and for minimum wage laws to be tightened. Although the Government published the December guidance they seem unwilling to do anything further at present.
The Government Guidance has this section on Unpaid Work Trial Periods:
“The views of the government set out in this guidance are not binding or determinative in any case but are intended to assist employers and individuals in identifying circumstances in which at least the minimum wage must be paid. It is for HMRC enforcement officers, and ultimately for tribunals and courts, to decide whether the minimum wage should be paid in any particular case. Employers who do not pay at least the minimum wage for work trials should consider seeking professional advice on whether this would breach NMW or other employment law.
As part of a recruitment process, an individual may be asked by a prospective employer to carry out tasks, without payment, to help the employer to decide whether the individual has the skills and qualities required for the job. Often this will be a legitimate practice, but some employers may use unpaid trial work periods to obtain work or services for which at least the minimum wage should be paid. Current law does not define a “trial work period” or state precisely when at least the minimum wage must be paid.
NMW legislation provides that an individual who is “working” for minimum wage purposes must be paid at least the minimum wage. Most workers in the UK who are over compulsory school age and who ordinarily work in the UK are entitled to be paid at least the minimum wage. An individual will generally be a “worker” if they have a contract of employment or a contract to provide work or services. There may be a contract even though there is nothing in writing. Where an employer asks an individual to carry out a “trial”, “test” or “recruitment exercise”, the individual may nevertheless be a “worker” and entitled to minimum wage.
Whether a work trial results in a contract requiring the minimum wage to be paid will depend on the circumstances of the case. There are currently no definitive rules or tests; however, a court or tribunal is, in the government’s view, likely to take account of the following factors:
- whether a “work trial” is genuinely for recruitment purposes (if it is not, it will generally be considered to be work and the individual will be eligible to be paid the minimum wage);
- whether the trial length exceeds the time that the employer would reasonably need to test the individual’s ability to carry out the job offered (in the government’s view an individual conducting work in a trial lasting longer than one day is likely to be entitled to the minimum wage in all but very exceptional circumstances);
- the extent to which the individual is observed while carrying out the tasks;
- the nature of the tasks carried out by the individual and how closely these relate to the job offered (where the tasks are different from those which the job would involve, this may indicate that the employer is not genuinely looking to test the individual’s ability, but rather to get the tasks carried out);
- whether the tasks carried out have a value to the employer beyond testing the individual (where the tasks are carried out in a simulated rather than real environment, this will normally indicate that they do not have such a value and that the individual is not “working”);
- whether trial periods are important (aside from recruiting) to the way the employer runs its business (for example, where trial periods are being used by the employer as a means to reduce labour costs, this is likely to indicate that the individual is “working”).
There are reports of some unpaid trial work periods extending across more than one full shift or several days. Unpaid trials of this sort of length in a real (not simulated) work environment are likely to create an entitlement to minimum wage in all but very exceptional circumstances – especially in sectors where workers are paid at or close to the minimum wage. This is because what is done by the individual would almost certainly have substantial value to the employer rather than testing the individual’s ability. This could mean that there is a contract under which the individual would be a worker entitled to the minimum wage.
However, in some cases an unpaid trial work period lasting a few hours may be reasonable and not create an entitlement to minimum wage. This is because the main purpose would likely be to test the individual, and what is done would probably have little or no other value to the employer: the substance of the arrangement would therefore concern recruitment rather than providing work. The individual would therefore probably not be entitled to the minimum wage.
A key consideration is that the longer a trial period continues, the more likely it is that it results in a contract to provide work and that the minimum wage becomes due.
Ultimately, work trials have to be assessed on a case-by-case basis by HMRC enforcement officers and where necessary by courts and tribunals, taking account of the precise detail of the arrangements, including the duration and also what the worker is being asked to do. HMRC officers consider every complaint they receive and will take enforcement action where they consider workers are being exploited under the cover of recruitment.
NMW legislation permits a very limited number of exceptions for particular schemes which permit unpaid work trials. These include the government’s Work Trial scheme, which aims to help disadvantaged benefits claimants try work in a risk-free environment and which provides a job guarantee if both the jobseeker and the employer are satisfied following the trial.
Unpaid trial work periods – example scenarios
The following hypothetical examples are intended to illustrate some of the factors outlined above and how, in the government’s view, these might be taken into account in particular circumstances. The facts of real cases will naturally be more complex. It is for HMRC enforcement officers, and ultimately for tribunals and courts, to decide whether the minimum wage should be paid in any particular case.
If you have any questions just get in touch!