HM Revenue & Customs confirmed that it has received information from careers advice service Graduate Fog suggesting that young people on work experience have been put to work in the styling department.
It has been alleged that four interns had been working as fashion assistants for the last three months, with more occasionally recruited for the live shows.
"We welcome HMRC's move to investigate The X Factor," Graduate Fog founder Tanya de Grunwald told The Guardian. "With record youth unemployment, the spread of this illegal practise is a big and emotive issue for young people. Unpaid labour is not the solution to youth unemployment, it is a big part of the problem."
Although there is no suggestion that Simon Cowell is aware of the alleged issue, de Grunwald declared: "If The X Factor is found to have broken the law, we would like him to issue a public apology, so that other big businesses will get the message loud and clear that it is not okay to take advantage of their young staff."
X Factor producers Talkback Thames said that they were unaware of work experience personnel assisting show stylist Laury Smith, though they clarified that "her interns are not X Factor interns".
A statement insisted: "Talkback Thames does not use free interns. We have a strict policy on all of our shows where we always pay people except when they are doing genuine, short-term work experience and are not actually performing any work or it's a formal school or college placement.
"Everyone else is paid. We were not aware that interns were being used by the stylist and we are looking into the matter."
The practice of employing unpaid interns is said to be rife within the media industry, and HM Revenue & Customs are planning to expose violations within production companies and the print media with unannounced inspections.
The X Factor final airs tonight (December 10) at 8pm on ITV1.
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