Are unpaid work trials lawful?

Using an unpaid work trial is a practice that is often used by businesses as part of their recruitment process. Employers may wish to examine if the potential employee can demonstrate the required skills for the role and handle the pressure in a real working environment. Work trials can be a useful way of allowing businesses to test this. However, such a trial may or may not lead to a job offer.

Legality

According to the National Minimum Wage Act1998, employers are required to pay a certain minimum wage to their workers (that rate being set on 1^st April each year). An exception to this rule, is that the worker is participating in a scheme to assist in the seeking or obtaining work. Therefore, companies are allowed to offer unpaid work trials, and the practice itself is legitimate and not per se illegal.

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However, in the recent past, employers have used unpaid work trials as an opportunity to obtains free labour. This might turn, a legitimate way to assess employees, into exploitation of the candidates. The lack of legislative guidance on the practice leads to a number of issues. The issue that the employers often face is whether or not to pay the candidates during the trial period. If paid, does it have to meet the National Minimum Wage requirements?        

Excessive use of unpaid work trials might lead to situations when the individual candidate might considered to be a ‘worker’ for the purposes of National Minimum Wage and entitled to the minimum wage.

While there are some exceptions, all workers are entitled to the minimum wage. A worker is someone who has entered into or works under a contract of employment or any other contract by which the individual undertakes to perform work or services personally for someone else.

Factors to be considered

Situations in which the individual qualifies for the minimum wage will depend on the circumstance of the particular case. There are a number of factors given in the form of guidance by the Department of Business, Energy and Industrial Strategy that might need to be taken into consideration:

• 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’)

When workers are paid at all, and an individual is required to work full shifts or shifts for several days. It is highly likely, apart from exceptional circumstances, that the individual will be entitled to the minimum wage.  This is because the work that the individual is required to do, would seem to be necessary and of substantial value to the employer and not just limited to testing their suitability for the role. Longer trial periods, are therefore likely to result in a contract to provide work, rather than just being limited to testing their ability. Therefore, the value of the work done to the employer, is a key consideration in determining if the individual will be entitled to the minimum wage.   

Longer Work Trials

An exception to offer unpaid work trials for more than a day, is if the employer offers a job trial to someone who is unemployed and receiving benefits, and the job seeker is voluntarily participating in a government scheme. In such case, legality of work trials might depend on the following, which apply to the candidate. That they are:

• Continuing to receive benefits for the duration of the work trial;
• That they are trying out for a job that lasts at least 16 hours a week for 13 weeks;
• hat the candidate is the only individual being considered by the employer;
• The duration of the trial period has been agreed beforehand, which has to be under five days for a job lasting less than 6 months, and under 30 days for a longer job; and
• That meeting the required level of performance leads to a job offer, if the employer and the individual are satisfied.

Steps Employers can take

Businesses contemplating using unpaid work trials must tread with caution, and not fall foul of the National Minimum Wage requirements, in order to avoid investigations and fines by the HMRC, which might be very hefty. Employers should to avoid this take the following steps:

• Inform the candidate, of the duration of the trial period.
• Be clear as to why the trial period needs to be for the period of time given, particularly if the suggestion is that it is for more than one day (keep a written dated note of the reason for this decision).
• Let the candidate know what they will be expected to do, beforehand.
• Make it clear that the work trial will be unpaid.
• Make sure the candidate is assessed and not left completely unsupervised.
• Keep written evidence of this.

Contact our expert employment law solicitors

If you'd like to learn more about the laws around unpaid work trials, or make an enquiry with one of our employment solicitors, contact our Employment Team today by calling 023 8071 7717 or emailing employment@warnergoodman.co.uk.