Careful how you classify ‘interns’: Ministry of Labour releases policy statement

June 12, 2013 Employer Advisor, McCarthy Tétrault LLP Employee Relations, Employment/Labour Standards, HR Policies and Procedures, Human Resources, Payroll, Recruiting and Hiring, Source Deductions and Reporting, Training and Development, Union Relations, Wages and Compensation

It is a fact of life for some entering the labour market—the unpaid internship. For young workers, it is an opportunity to gain experience in a desired field. For employers, it is an opportunity to have recent graduates perform necessary work or apprenticeship at less cost all while assessing suitability for continued employment. Perhaps the modern internship is best explained by the following:

With the attention that “interning” has been getting in the media, including by Hollywood (see above) and by the recent HootSuite controversy, the Ontario Ministry of Labour (MOL) has taken notice and issued a recent policy statement that clarifies both the MOL’s position and that many intern relationships will not be considered as such by the MOL.

What is an intern?

In order for someone to be a true intern, and not an employee under the Employment Standards Act, 2000 (ESA), the individual must be receiving training from an employer in a skill used by the employer’s employees. In addition, all of the following conditions must be met:

The training is similar to that which is given in a vocational school
The training is for the benefit of the intern
The employer derives little, if any, benefit from the activity of the intern while he or she is being trained
The individual does not take someone else’s job
The individual is not being promised a job at the end of the training
The individual has been told that he or she will not be paid

In addition, because the ESA does not apply to individuals who perform work under a program approved by a college or university, such individuals can properly be classified as interns and not employees.

Take-aways

While the MOL’s position does not change the law, it is important for employers to note the MOL’s increased focus on these types of issues (and with young workers in general). In industries with young workers or where it is common to have unpaid staff classified as “temps”, “interns” and “volunteers”, the MOL is much more likely (whether through an audit or a staff complaint) to closely scrutinize this issue and issue orders for breaches of the ESA. A finding of employment by the MOL could result in an order to pay minimum wage, vacation pay, holiday pay, etc. that the individual should have received had he/she been properly classified as an employee under the ESA.

In addition, for unionized employers, interns may be found to be employees under a collective agreement by an arbitrator thus entitling such individuals to the benefits of the collective agreement.

Given the consequences of an adverse finding and the potential liability, employers should carefully review their arrangements with interns with a view to minimizing the risk of such staff being classified by the MOL or an arbitrator as employees. The MOL’s policy statement is a good place to start.

Daniel Pugen
Ontario Employer Advisor
Published with permission from McCarthy Tétrault LLP

About
Latest Posts

Follow me

Employer Advisor, McCarthy Tétrault LLP

Employment and labour lawyers at McCarthy Tétrault LLP

McCarthy Tétrault through their Employer Advisor blogs offers their perspectives on the latest legal developments applicable to the workplace. It provides their insights on legislative and regulatory developments, as well as new case law, while providing practical tips for employers and their human resources professionals when managing the workforce. McCarthy Tétrault is a Canadian law firm that delivers integrated business law, litigation services, tax law, real property law, labour and employment law nationally and globally. Several of their blog posts will be republished with permission on First Reference Talks. Read more