Employers could be breaking the law if they continue to offer unpaid internships, experts have warned.
The warning came after a survey from the Sutton Trust found that of employers offering internships, almost half said they were unpaid positions.
Just over a quarter offered expenses only internships and 12% no pay or expenses whatsoever.
The Pay As You Go survey found that both graduates and employers are confused about the current law on unpaid internships. Under national minimum wage legislation, interns must be paid if they are expected to work set hours or on set tasks. Up to 50% of employers and 37% of graduates surveyed were not aware that most of such unpaid internships are likely to be illegal.
Retail had the highest proportion of unpaid internships at 89%, followed by the arts, 86% and the media, 83%.
Only 26% of IT & telecoms and 32% of manufacturing internships were unpaid.
The research found that graduate internships appear to be on the rise, with 46% of 21-23-year olds have been employed this way, compared to 37% of 27-29-year olds. Younger graduates are also more likely to have taken on more than one internship. According to the report, there are around 100,000 interns working in Britain every year, with around 58,000 unpaid.
The survey comes as a bill to ban unpaid internships over four weeks in length is brought to the House of Commons. It would like to see all internships longer than one month to be paid at least the National Minimum Wage of £7.05 for 21-24-year olds, and ideally the Living Wage of £9 per hour.
In addition, the report recommends that internship positions should be advertised publicly, rather than filled informally and recruitment processes should be fair, transparent and based on merit.
Sir Peter Lampl, founder of the Sutton Trust and chairman of the Education Endowment Foundation, said: “Unpaid internships prevent young people from low and moderate-income backgrounds from accessing careers in some of the most desirable sectors such as journalism, fashion, the arts and law.
“This is a huge social mobility issue. It prevents these young people from getting a foot on the ladder. The legal grey area around internships allows employers to offer unpaid internships with impunity. That is why the law should be changed.”