Advice on unpaid work trials has been added to HMRC’s guidance on calculating the National Minimum Wage (NMW).

Work trials are sometimes offered for legitimate reasons as part of a recruitment process. However, some employers may use unpaid work periods to obtain work or services that should be paid. This is often a grey area because there are currently no definitive rules or tests as to whether the NMW should be applied.

Although HMRC has given more detail about how it goes about assessing whether an individual should be paid for a work trial, it states that the guidance is “not binding or determinative in any case, but are intended to assist employers and individuals in identifying circumstances in which at least the National Minimum or National Living Wage (NMW/NLW) must be paid”.

It highlights that it is for HMRC enforcement officers, and ultimately for tribunals and courts, to decide whether the NMW/NLW should be paid in any particular case. It recommends that employers considering offering unpaid trials should seek professional advice on whether they would be in breach of NMW or other employment laws.

Despite this, the guidance outlines several points that employers should take into account when determining whether a trial should be paid. These include:

  • whether the trial is genuinely for recruitment purposes;
  • the length of the trial – it notes that if a trial lasts more than one day the individual is likely to be entitled to the NMW;
  • the extent to which the individual is observed;
  • the nature of the tasks and how closely these relate to the job offered;
  • whether the tasks carried out have a value to the employer beyond testing the individual;
  • whether trial periods are important (aside from recruiting) to the way the employer runs its business.

“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,” stated the guidance. “HMRC officers consider every complaint they receive and will take enforcement action where they consider workers are being exploited under the cover of recruitment.”

Read the full guidance for more details, as well as a list of possible unpaid work trial scenarios.

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