Bram Lecker Discusses Unpaid Internships with Advocate Daily | This article was authored by and originally appeared on Advocate Daily. It is published with their permission.
Tread Carefully When Offering Unpaid Summer Internships
Lecker, principal of Lecker & Associates, explains that generally, anyone who is not self-employed and carries out work for another person, company or organization is considered an employee and entitled to the provisions of Ontario’s Employment Standards Act (ESA), such as the minimum wage and severance pay.
“You can’t avoid those responsibilities just by labelling someone ‘intern,’” Lecker says. “Any employer considering using someone who will work for free to gain on-the-job experience must be very wary because you might be opening yourself up to significant liability.”
In fact, he says provincial law allows companies to have unpaid interns in only very limited circumstances, such as when the work includes training under an approved college or post-secondary educational program.
Lecker says employers can create their own unpaid internships as long as they meet all of the following requirements:
- The training offered is comparable to that which is provided in an occupational training school.
- The training is for the benefit of the intern — the employer should obtain little to no benefit while the intern is being trained.
- The unpaid internship should not take the task or position away from someone else working there.
- There is no promise of permanent employment at the end of the training.
- The position is not funded by a third party.
Without meeting those requirements, employers leave themselves open to action by the Ministry of Labour if it determines a misclassification has occurred.
“It’s a legal grey area,” Lecker says. “But what’s important to consider is whether a volunteer is doing work that would otherwise be carried out by a paid employee.”
In addition, he says competitive application processes and minimum scheduling requirements for unpaid internships could tip the balance of a ministry assessment towards the employee end of the spectrum.
“It’s going to be a case-by-case assessment,” Lecker adds.
According to a Canadian Press report, a recent enforcement blitz in Ontario detected 77 workplaces using interns — almost a quarter of them were in violation of the rules — and resulted in the recovery of approximately $140,000 in unpaid wages.
Despite the restrictive definition and recent crackdown, Lecker says unpaid internships remain popular, with no shortage of advertising by companies in a range of industries offering work experience. He suspects not all may be in compliance with the provincial regulations.
“Given the straightforward requirements of the law, it is surprising that organizations are taking the chance and thumbing their noses at it in such a flagrant manner,” he says.
Whether or not internships meet the technical specifications of the ESA, Lecker says negative press is another risk for employers considering zero remuneration, especially for high-profile or highly profitable organizations, with news storiesfrequently touching on the issue.