This week, we did not publish an HRinfodesk newsletter. As a result, our regular featured post “Most-viewed articles this week on HRinfodesk” is not available. Instead, we are happy to provide you with the following HRinfodesk poll result and commentary.
The issue of unpaid work has been a hot topic for quite a while now, and despite efforts by authorities to clarify the legal status, sometimes it seems that employers aren’t understanding it any better. To get a better idea of where our readers stand, we recently asked, Do you have unpaid internships at your organization? Slightly more than 80 percent of respondents said no, they don’t use unpaid interns, while nearly 20 percent said yes, they do. We didn’t ask whether employers are using legal unpaid internships, or whether they know if their internship arrangements are legal, but we’d like to offer our two cents and hopefully help our readers understand what’s legal and what’s not when it comes to unpaid internships.
It’s not too surprising that employers are confused or unaware about the legal status of unpaid internships. No provincial labour standards law directly discusses interns, and only three provinces have attempted to clarify the message with official statements. In any case, employers should know what they’re getting into if they use or want to use unpaid interns.
In British Columbia, the Employment Standards Act says an employee includes a person who receives or is entitled to wages for work performed for another, is trained by an employer for the employer’s business, or who does work normally performed by an employee. All employees are entitled to at least minimum wage. This definition of employee clearly captures most work arrangements, including internships.
In fact, BC’s Ministry of Labour has an interpretation manual for the Act that specifically defines internships as “on-the-job training offered by an employer to provide a person with practical experience.…If the duties performed by interns fall within the definition of ‘work’ contained in the Act, the intern falls within the definition of ‘employee,’ and the agency using the services of an intern falls within the definition of ‘employer,’ internships will be considered ‘work’ for the purposes of the Act.”
BC’s Employment Standards Act does offer an exception for students in certain post-secondary programs:
A ‘practicum’ is part of a formal education process for students enrolled in a public or private post-secondary institution that involves the supervised practical application of previously classroom-taught theory related to course study. The students are usually engaged in studies to obtain a degree so as to pursue a career in education, medicine, or engineering. A practicum is “hands-on” training that is required by the curriculum, and will result in a certificate or diploma. It is not considered to be ‘work’ for the purposes of the Act.”
It is likely that most employers using interns do not fit this exception. If they do not, they must pay their interns.
In Ontario, the Employment Standards Act specifies that an employee includes a person who receives training from an employer, in other words, most people that work for an employer. However, there are two strict exceptions. One, a person who meets all of these conditions is not considered an employee:
- 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.
And two, the Act doesn’t apply to approved internship or co-op programs provided by post-secondary schools.
The aim of the first exception is to prevent employers from using unpaid workers in place of paid workers. The aim of the second is to encourage employers to provide necessary practical experience to students.
The Canadian Intern Association finds that under labour standards legislation in Manitoba, Newfoundland and Labrador and Nova Scotia, interns would likely be classified as employees who are therefore entitled to pay. However, the laws are unclear in Alberta, Saskatchewan, New Brunswick and Prince Edward Island. In Quebec, the association finds, the Act respecting labour standards doesn’t consider unpaid interns to be employees, but each case will likely require individual evaluation.
The Canada Labour Code, covering federally regulated employers, is also unclear on the issue of interns. The law itself doesn’t discuss internships, but an interpretation note states, “Training initiated on the volition of the employee or developmental voluntary training which prepares the employee for another job DOES NOT CONSTITUTE hours of work.” Employers might use this loophole to justify their internship arrangements—indeed, several do—but without an explicit legal statement on the issue, there is always a risk of non-compliance.
In brief, provincially regulated employers in BC, Ontario and Quebec must be very careful about using unpaid interns, as they are regulated in those provinces. The law is less clear in other jurisdictions, and employers should consult a lawyer before they implement an unpaid internship program.
The effects of unpaid internships are about as clear as the law. Surely, they purport to offer benefits to employers: free labour and little administration. But do they help workers gain the skills needed to find the jobs they want? Do they supplant regular paid employees? Does unpaid labour support the economy? Do employers exploit unpaid interns? Do employees provide value to interns? Are employers respecting interns’ privacy? It’s difficult to know the answer to these questions because nobody is keeping track of interns in Canada.
As with many employment issues these days, there is also a human rights aspect to unpaid internships. Employers should consider that unpaid internships might conflict with various prohibited grounds of discrimination, in particular family status and social condition (where applicable), but perhaps also disability, including addiction. If an unpaid internship precludes any protected group from performing the work, it might fall afoul of human rights legislation. For example, a person who is taking care of a sick parent might not be able to afford to work for free.
It is not clear if human rights tribunals would consider legal unpaid internships to be employment, but with unpaid internships getting lots of media attention recently, and advocacy organizations empowering interns, we might find out.
This subject might be even more important for jurisdictions without clear statements on internships, as the lack of clarity makes it more difficult to determine whether an unpaid internship is legal or not. Regardless of where they are though, all employers should be asking themselves whether their internship arrangements are exempt from employment standards legislation.
First Reference Human Resources and Compliance Editor