Justin W. Anisman is an Employment Lawyer and principal of Anisman Law. Justin advises both companies and individuals in all aspects of employment law including wrongful dismissal, human rights and discrimination.
In theory, unpaid internships are meant to provide useful training to those without job experience to pad resumes and prepare them for the working world. In reality, many unpaid internships offer no training and enter the realm of being considered exploitive. Many unpaid interns find themselves in positions that are nothing more than menial work positions. These sorts of internships are, in fact, illegal.
This article will review some definitions of unpaid internships and outline some ways the rights of unpaid interns are protected.
The term “intern” (or “stagiaire” in French) is extremely ambiguous and can refer to:
- Employees on a fixed term contract;
- Students participating in experiential learning (such as an internship for academic credit, cooperative education program, or apprenticeship program); or
- Volunteers for a not-for-profit or charitable organization.
While some employees may be considered interns, not all interns are necessarily considered employees. Different rights and laws apply to interns and employees. Interns are not automatically considered employees under the Employment Standards Act (“ESA”) and are therefore not guaranteed certain rights. In this sense, it is very important to understand the nature of the internship being offered and what rights apply to the position.
In many cases, unpaid interns end up doing the work of employees and are subject to a large amount of control and direction by their employers. Even if an intern agrees that they will not be paid does not mean that the employer is complying with their provincial employment standards. Any clause about that agreement in an oral or written contract is null and void if it contravenes the respective law.
Definition of Intern
The Employment Standards Act (ESA) protects the rights of employees in Ontario. These provincial laws apply to all “employees” and “employers” in the province unless specifically exempted. With regards to internship exceptions, the ESA states:
(2) For the purposes of clause (c) of the definition of “employee” in subsection (1), an individual receiving training from a person who is an employer is an employee of that person if the skill in which the individual is being trained is a skill used by the person’s employees, unless all of the following conditions are met:
- The training is similar to that which is given in a vocational school.
- The training is for the benefit of the individual.
- The person providing the training derives little, if any, benefit from the activity of the individual while he or she is being trained.
- The individual does not displace employees of the person providing the training.
- The individual is not accorded a right to become an employee of the person providing the training.
- The individual is advised that he or she will receive no remuneration for the time that he or she spends in training.
The ESA does not apply to an individual who performs work under a placement program approved by a university or college of applied arts and technology.
Nor does the ESA apply to anyone who is a true volunteer – i.e. a person helping out a neighbour or friend or volunteering at a charity. The legal test for a true volunteer arrangement looks at several factors – merely agreeing to work without pay does not alone make an individual a volunteer.
The Ontario Labour Relations Board decision, Sandhu v Brar, 2013 CanLII 43024 (ON LRB) confirmed that even if an employer and employee agree that an unpaid intern will not be paid for his labour, if the work performed looks more like labour than training, wages can still be owed to the employee.
Thus, unpaid interns who are not students in an approved work program or who do not meet all of the six conditions set out per the ESA (above) must be paid at least minimum wage in Ontario.
The Law of Unpaid Internships
Generally, courts and provincial authorities apply the employment standards provisions broadly based on the common law test for an employee, which will catch many interns. If an intern is not specifically exempted, they should be paid at least minimum wage.
The law is intended to exclude ESA protections only from real, legitimate training programs designed to educate the intern. The employer is supposed to be doing a social service by exposing the worker to the “real” workplace. It is not supposed to be a situation whereby employers can get cheap or free labour.
Risks to Employers
Meeting the requirements of an unpaid internship is difficult to do. It is important to realize that the fact that both sides may agree that the “worker”/ “student” / “intern” will not be paid, does not meet the requirements of a legal unpaid intern. Under such circumstances, if the intern elects to make a complaint to the Ministry of Labour, even after they have left “employment”, the Ministry can order the employer to pay wages that ought to have been paid.
Companies found to be in violation of the provincial employment standards are apt to face obligations to pay fines, to pay back wages, vacation pay and statutory holiday pay, and, perhaps most seriously, face very negative publicity.
An exploited employment sector
Unpaid internships are coming under fire by the media as seen as a means of exploiting young people for free labour and depressing the job market. They result in significant social consequences but many students continue to feel there is no other choice but to accept unpaid positions for experience.
Below is an excerpt from a recent local job posting:
A start-up in Toronto needs an unpaid intern for UI/UX Design. The start-up is a graduate of an incubator program in Silicon Valley. You will work with the founder, product owner and tech team. You will create prototype and convert the design to HTML/CSS.
The represents an example of exploitation in that there is no training involved. The job is labour and under the protection of the ESA, the intern should be offered at least minimum wage.
Improving the protection of the rights of interns
The term “intern” is absent from employment legislation. It is an industry term. There seems to be a widely held belief is that employers avoid the employment law rules simply by labelling someone an intern.
A blitz in Ontario run by the provincial authorities a number of years ago found that nearly half of all employers who hosted interns were in violation of the employment standards acts. The results of this investigation were released to the public. Since then, Ontario has been a gold standard for enforcement of intern labour laws at the provincial level.
The growing popularity of unpaid internships leads many to believe that it may be time for government to address them in law instead of treating them as exceptions through the ESA.