Unpaid trial shifts have become a typical part of the recruitment process for many businesses across the UK, particularly in the hospitality and retail sector where job candidates are regularly required to complete unpaid trial shifts. Unpaid trial shifts can be a useful tool for employers to assess a job candidate’s ability, particularly where employees are inexperienced. However, there are concerns that many employers are abusing unpaid trial shifts and using them as a method of obtaining free labour.
The practice has drawn a lot of criticism in recent years for exploiting vulnerable people seeking work. It’s estimated that unpaid trial shifts contribute to an estimated £3 billion in lost wages in the UK every year. Despite the criticism the practice has received it looks like unpaid trial shifts are here for the foreseeable.
In January 2021, a House of Commons petition calling for a ban on unpaid trial shifts by Glasgow based student, Ellen Reynolds gained more than 10,000 signatures and was debated in Westminster. However, the UK Government confirmed that they did not have any plans to ban unpaid trial shifts and claimed that robust enforcement action is already taken against employers who exploit workers on unpaid trials shifts.
Unpaid trial shifts are currently legal in the UK. However, depending on the circumstances of the case, where an employer asks an individual to carry out a ‘trial’, ‘test’ or ‘recruitment exercise’, the individual may nevertheless be a classed as a ‘worker’ under national minimum wage legislation and be entitled to national minimum wage.
There is no legislation defining what unpaid trial shifts are or when an employer must pay an individual completing a work trial at least the national minimum wage. However, the Government has published guidance, with illustrative examples, which aim to clarify when an employer should be paying the national minimum wage to individuals completing work trials. The guidance can be found here.
The Government Guidance acknowledges that 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. However, there are currently no definitive rules or tests which allow employers to determine whether job candidates completing a work trial require to be paid national minimum wage and it depends entirely on the circumstances of each case.
The Government Guidance provides a list of factors that may be helpful to consider when determining whether an unpaid trial shift is a genuine work trial or if national minimum wage should be paid. These factors include:
Ultimately, HMRC enforcement officers and, where necessary courts and tribunals will assess work trials on a case-by-case basis. They’ll take account of the precise detail of the arrangements, including the duration and what the worker is being asked to do. HMRC officers consider every complaint they receive and should take enforcement action where they consider workers are being exploited under the cover of recruitment.
The consequences for failing to adhere to National Minimum Wage legislation can be severe for a business. HMRC can ‘name and shame’ companies that fail to pay national minimum wage which can cause devastating reputational damage. HMRC can also order the company to pay back the underpayment and can impose fines of up to 200% of the money that is owed to the worker (up to a maximum of £20,000 per worker).
Employers should familiarise themselves with the Government Guidance and exercise caution when using unpaid trail shifts as a recruitment tool.
The main purpose of the unpaid trial shift should be to test the individual’s ability to do the job offered and the unpaid trial shift should be no longer than is reasonably necessary to test the individual’s ability to do the job offered. The longer the trial period continues, the more likely it is that it will result in a contract to provide work and that national minimum wage becomes payable. A trial shift which only lasts a few hours may be reasonable and not create an entitlement to national minimum wage.
It is good practice to provide the individual with full details about how long the trial period will last, tell the individual what they will be expected to do on their trial shift, make sure the individual understands that the trial shift is unpaid and keep written records.
If you have any queries regarding unpaid trial shifts or require assistance reviewing your recruitment policies or practices, please contact Craig McCracken.