Last month, two of Canada’s highest profile magazines (The Walrus and Toronto Life) were advised by the Ontario Ministry of Labour to immediately end their internship programs after complaints about unfair labour practices (read more here).

For many companies, summer “internship” programs are about to kick off.  Before they do, employers should find out if these programs are in fact legal.

Many employers in Canada mistakenly assume that they can call an employee an “intern” and thus avoid employment legislation.  The recent buzz around “unpaid internships” has raised some awareness around this topic, yet many employers’ questions remained unanswered.

Who is an “Intern” at Law?

As the Ministry of Labour’s website advises, the fact that someone is called an “intern” does not determine whether or not the person is entitled to the protections of the Employment Standards Act, 2000 (ESA).  Ontario’s ESA states that all employees must be paid at least the Ontario minimum wage.

Under the ESA, a worker is either an “employee” or not an “employee” and only “employees” are covered under the ESA. An “employee” includes a person who receives training from an employer.

In general, most individuals performing work for another person or a company or other organization would be considered to be an “employee”, and therefore entitled to ESA rights such as minimum wage.

There are some exceptions under the ESA, but they are very limited.  As noted, the title “intern” is not relevant.  The intern will generally be considered to be an employee for purposes of the ESA, unless all six of the following conditions are met:

1. The training is similar to that which is given in a vocational school.
2. The training is for the benefit of the intern. You receive some benefit from the training, such as new knowledge or skills.
3. The employer derives little, if any, benefit from the activity of the intern while he or she is being trained.
4. Your training doesn’t take someone else’s job.
5. Your employer isn’t promising you a job at the end of your training.
6. You have been told that you will not be paid for your time.

The Co-Op Exception:

Keep in mind, the ESA does not apply to an individual who performs work under a program approved by a college of applied arts and technology or a university. This exception exists to encourage employers to provide students enrolled in a college or university program with practical training to complement their classroom learning. Learn more about Co-op employment here.

Financial Incentives for Employers

There are a number of financial incentives available to employers who hire youth or students for the summer, or longer. Learn more here.

JVS Toronto can also arrange for hiring incentives up to $7,000 to Employers to help cover the cost of wages and training for new hires, ages 15-29 years of age, when they provide a job placement of four to six months. Learn more here.

The Bottom Line

Employers, as the summer approaches, we urge you to be mindful of the legal implications of hiring an “intern”.  Employment legislation in Ontario (and the rest of Canada) is intended to protect workers from falling prey to schemes of free labour under the guise of “training”.  The exclusions from ESA protection are limited and only intended for legitimate training programs designed to educate the intern.

If you are an employer contemplating the implementation of an internship program in your workplace, contact us to better understand the legal implications involved or any exceptions that may apply.

If you are someone performing work as part of an unpaid internship and unsure of whether the ESA exclusions apply to you, contact us to better understand your rights.

For more information on Internships under the ESA, check out the Ministry of Ontario’s publication on the issue.

Disclaimer: this post is intended for educational and non-commercial purposes only and is not intended to be a source of legal advice to any person in respect of any particular legal issue; it does not create a solicitor-client relationship with any readers. If you have a legal issue or possible legal issue, please contact us.

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