UNPAID INTERNS

Do I have to pay interns? Are unpaid interns legal in Ontario?

These are just some of the questions asked by many as the topic of unpaid interns has recently been a hot issue in Ontario. The problem with the current Ontario legislation is that it leaves those working in unpaid internships vulnerable, specifically:

  1. While it is legal to employ unpaid interns, many unpaid internship positions do not meet the legislative requirements and are actually illegal. Some workers should actually be receiving minimum wage for the work performed; and
  2. Unpaid interns are not covered by The Occupational Health and Safety Act1,(theOHSA), the legislation which requires an employer to tell workers that they have the right to refuse unsafe work.  The OHSA defines a “worker” as a “person who performs work or supplies services for monetary compensation”.

Unpaid Interns and the Employment Standards Act, 2000 (Ontario)

Under the Employment Standards Act, 20002 (Ontario) (the “ESA”), all “employees” must be paid at least Ontario’s minimum wage. A person being trained by the employer is considered to be an “employee” unless, the internship is part of a program approved by a college or university or all of the following conditions apply:

  1. The training is similar to that which is given in a vocational school;
  2. The training is for the benefit of the individual;
  3. The person providing the training derives little, if any, benefit from the activity of the individual while he or she is being trained;
  4. The individual does not displace employees of the person providing the training;
  5. The individual is not accorded a right to become an employee of the person providing the training; and
  6. The individual is advised that he or she will receive no remuneration for the time that he or she spends in training.3

If a worker is part of a program approved by a college or university or the worker’s position meets one of the 6 requirements under section 1(2) of the ESA, the employer is not required to pay the worker minimum wage.

However, some might argue that it is rare for a position to be for the benefit of the individual, where the employer will derive little benefit from the position. Many positions designated as unpaid internship may not actually qualify under the stringent requirements of the ESA and as such, are illegal positions.

The Occupational Health and Safety Act

The issue with the OHSA is being addressed by Bill 146, An Act to amend various statutes with respect to employment and labour, which was introduced by the Ontario government in early December 2013. The goal of this bill is to increase protection for employees and workers in Ontario. With all the recent attention surrounding unpaid interns and protection of vulnerable workers, it comes as no surprise that the bill proposes to expand the definition of “worker” in the OHSA to include:

  • A secondary school student who performs work or supplies services for no monetary compensation under a work experience program authorized by the school board; 
  • A person who performs work or supplies services for no monetary compensation under a program approved by a college of applied arts and technology, university or other post-secondary institution; and
  • A person who receives training from an employer, but who, under the ESA, is not an employee for the purposes of that Act because the conditions set out in subsection 1 (2) of that ESA (as set out below) have been met.

If this bill passes it will address the issue of unpaid interns and safe work environments, but still leaves open the issue of illegal unpaid intern positions.

Caution to Employers

With all the current focus on unpaid internships and protecting young and vulnerable workers, employers need to be cautious when hiring for unpaid internship positions that are not part of a program approved by a college or university. Employers need to ensure that the position meets the 6 requirements of the ESA and if it does not, employers need to satisfy Ontario’s minimum wage requirements.

 

 

Mariana Fonar is a Corporate Associate specializing in Employment Law at Dale & Lessmann LLP, Toronto, Ontario, a full service business law firm. To speak to Mariana please call 416-369-3811 or send an email message to her at mfonar@dalelessmann.com. To download a pdf of this article, please click here.

[1] RSO 1990, c O.1.

[2] SO 2000, c 41

[3] Employment Standards Act, 2000, c. 41, s. 1 (2).