The EU is planning to clamp down on unpaid internships and “bogus” traineeships offered by unscrupulous employers with a new directive.

The move, which was criticised by some groups for not going far enough, is to be tabled on Thursday and is likely to be the last major legislative proposal before the mandate of the European parliament ends with the June elections.

Nicolas Schmit, the EU commissioner for jobs and social rights, said: “This is about companies that exploit the despair of young people.”

He said it was vital this practice was stamped out not only for the sake of young people but also to incentivise European companies to snap up “smart young people” before they consider emigration.

“The main thing you hear about in central Europe and maybe also some other countries in southern Europe is the brain drain; they complain that they are losing their better educated youth,” he said.

“And why does this happen? Because young people are not paid correctly or are just not paid at all when they are in a traineeship.”

However, Tea Jarc, of the European Trade Union Confederation, described the text from the European commission as “blurry”, and called for the directive to be more forceful.

“Clarity is needed to end the scandal of unpaid internships,” she said. “We need watertight language and a sharpening of the language, otherwise it’s going to leave the most vulnerable out.”

The EU estimates there are about 3.1 million trainees in Europe, half of whom are not paid. Jarc pointed to the European parliament vote last June, in which MEPs overwhelmingly backed the drafting of legislation that would ban most unpaid internships across the bloc. “The parliament was being very clear,” she said. “What we see today from the European commission is not as clear.”

When it came to the directive’s efforts to tackle bogus traineeships, Jarc criticised that the obligation had been left to labour authorities. “Labour authorities are currently facing huge challenges,” she said. “They do not have human or financial resources to detect violations of the labour market.”

Given that young people in these situations might hesitate to speak up, she instead called for member states and employers to be made responsible for cracking down on bogus traineeships.

The Young European Greens described the European Commission’s proposal as a “major letdown” and a “betrayal to the youth”, and called on the EU to ban unpaid internships.

“The proposal of the European Commission aims to ensure fair pay only for those interns who have completed their education and who are already getting paid,” it said on its website. “The commission is completely ignoring all students and those getting nothing for their labour.”

It pointed to the commission’s definition of worker to explain its interpretation of the directive, arguing that the definition had been narrowed to include only those who worked and received a wage – in essence excluding unpaid interns. “Unpaid work isn’t just a harmless oversight – it’s exploitation,” it said. “Only the most privileged of interns, who can rely on parental support, cheap housing and financial security can afford an unpaid internship and even then, we are still talking about exploitation.”

María Rodríguez Alcázar, the president of the European Youth Forum, said the proposal had fallen short of their expectations.

“The directive does not address the fundamental issue of pay, nor the rights of trainees at work,” she said in a statement. “Without binding rules on remuneration, the European Union will not end the exploitation of young people in the labour market.”

She added: “We expected more ambition to make work accessible to all young people, not just those who can afford to work for free.”

The proposals are part of a drive to reduce labour shortages with the EU identifying 42 occupation deficits including IT, cybersecurity, technical staff in the solar power industry, the battery sector and health and construction where there is perennial pressure.

There is also “a major problem in road transport with several hundred thousands leaving the workforce” since Covid, Schmit said.

The EU has identified a huge opportunity in the over-50s who have left the workforce. But unlike the UK, which has imposed barriers for entry to low-skilled workers, the EU is openly talking about the need to engage migrant workers at all skill levels.

According to a Eurobarometer survey in 2023, almost 80% of young Europeans said they had done at least one traineeship with nearly 70% saying they got a job after their training stint.

Though the EU does not have the legal power to insist on the minimum wage being paid as that is a national competency, under the proposals trainees and those on internships would be guaranteed some pay but also the rights to social benefits including sick pay and contributions to national insurance.

They would also require countries to set up rigorous inspection systems to crack down on employers using young people on low pay or no pay to do the same job as a regular worker.

Schmit added: “This is what we call bogus traineeship where I hire you as a trainee, but you do the same work as any worker.

“To help the labour inspectors, we have a list of things that would indicate that something is a bogus traineeship.”

Under the EU system, the commission drafts the laws but member states on the council of the European Union and MEPs will then pick it apart before arriving at an agreement. Council recommendations alread show it will not be plain sailing.

Directives in the EU require member states to change their national laws to comply with the overarching legislation emanating from Brussels.