Effective recruitment – are unpaid work trials lawful?
Recruiting staff can be expensive and time consuming, particularly in sectors where there is high staff turnover. Trial work periods can be a good way both for prospective employers to assess if a candidate has the right skillset and for a candidate to see if they like the work in practice.
While it will always be appropriate for employers to pay those who “work” for them at least the national minimum wage or national living wage (as appropriate) (NMW / NLW), the Government has now issued some guidance on when employers may use unpaid work trial periods in their recruitment processes. This is of particular relevance to the retail and hospitality sectors.
While the guidance is not binding on HMRC Officers charged with enforcing national minimum wage laws or tribunals and courts, the guidance sets out factors that a court or tribunal would, in the Government’s view, be likely to consider and gives examples of when a worker is or is not likely to be entitled to NMW / NLW.
In the past, recruiters had to either take a commercial decision as to whether to rely on unpaid trial shifts to assess candidate suitability with potential NMW compliance risk or take a much more cautious approach where candidates could only perform a few practical tasks to demonstrate skills, but without those tasks reflecting the actual demands of the role. For example, a candidate seeking a position as a barista in a coffee shop might be asked to make a cappuccino for an existing staff member or as a complimentary drink for a customer, but would not be asked to perform the same task under customer and time pressure, which would be representative of a typical shift.
The guidance suggests that unpaid trial shifts can be used as part of a genuine recruitment process, provided candidates are observed and assessed during the shift; the duration of the trial shift is proportionate; and the “work” undertaken is representative of the role the candidate would perform if successful. These are the most pertinent points, but the guidance sets out further factors in greater detail:
- 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 NMW / NLW);
- 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 NMW / NLW 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”).
We would always recommend employers have a consistent policy on trial shifts as part of their recruitment process to avoid discrimination claims. It is worth employers reviewing the HMRC guidance on unpaid work trial periods and the examples to ensure that how trial shifts are used in their business is appropriate.
The full guidance can be found here:
Department for Business, Innovation and Skills, National Minimum Wage and National Living Wage - Calculating the minimum wage – Updated December 2018
For more information please contact Clare Davis.