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Are Unpaid Interns Illegal in Canada?

 

I’ve been asked by the media twice in the last week about the legality of using “unpaid interns”.  Interns are usually understood to be people who receive practical experience in order to obtain some sort of training to help them get real jobs later.  It’s a good question to have employment law students examine. The answer is suprisingly complicated because governments are trying to balance a variety of competing interests.

On the one hand, employers could easily exploit a law that permitted them to simply call people interns and thereby avoid employment standards laws.  Also, unpaid interns could replace real jobs, which is not good for the economy.  On the other hand, the state wants young people to gain work experience, and some employers who would not otherwise provide workers with experience to develop skills might allow interns to gain some experience by hanging around the workplace if they don’t have to pay them.  Therefore, the state is trying to write a law that protects against the first two “bad” aspects of internships while permitting the third “good” aspect.  Try writing a law that does that!

Here’s my take on this.  THIS IS NOT A LEGAL OPINION.  If you have questions about your own situation as an “intern” or employer, call a lawyer, read the statute and form your own opinion, or call the Ministry of Labour.

You have to start with realization that under the normal rules of contract law, an agreement by a business to provide training and work opportunities to workers, without paying them, would be an enforceable contract.  There is no common law rule of contract that requires the consideration going to a worker be wages.  What potentially makes an ‘unpaid internship’ illegal is government regulation (Employment Standards) that requires that ‘employees’ be paid at least a minimum wage, among other entitlements.

So, we need to look at what the Employment Standards Act says about this.  Note firstly that the Ontario ESA  never mentions the words ‘unpaid intern’.  This is an HRM term, not a law term.  In the ESA, a worker is either an ‘employee’ or  not an ‘employee’.  Only “employees” are covered by the ESA.  Section 3(5) of the Ontario ESA excludes from the Act, “an individual who performs work under a program approved by a college of applied arts and technology or a university.” So that’s easy: if the internship is part of a higher education co-op program, then the Act does not apply.  This means it’s incumbent on the company, and the educational institution to ensure that workers are being properly trained, and not exploited.  Question:  Even if an internship is part of a formal training program, is there any good reason why normal ESA restrictions on maximum hours of work should not apply?

Then things get more complicated.  The Ontario ESA defines an “employee” (in section 1(1)) as follows:

“employee” includes,

(a) a person…who performs work for an employer for wages,

(b) a person who supplies services to an employer for wages,

(c) a person who receives training from a person who is an employer, as set out in subsection (2)…

Subsection (2) says (with my comments added):

(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 (NOTE THAT ALL OF THESE CONDITIONS MUST BE MET):

1. The training is similar to that which is given in a vocational school.

[What do you think a "vocational" school means?  Well, it almost certainly does NOT include getting coffee, answering phones, and running errands for some idiot who thinks an "intern" means "personal slave".  The law is intended to exclude from the ESA arrangements in which someone is receiving real training in a field that you could (or do) go to school to learn.  Ask whether there are educational programs that teach the specific skills the intern is being taught.  If the answer is no, then the ESA applies.  Do you know any colleges that teach "coffee making" or "errand running"?]

2. The training is for the benefit of the individual.

3. The person providing the training derives little, if any, benefit from the activity of the individual while he or she is being trained.

[So, numbers 2 and 3 together mean that the purpose of the internship/training is to provide a benefit for the intern, but not the person/entity providing the training.   Thus, if the person does "real" work, that the employer would need to have hired people do, then the intern begins to look a lot like an "employee"]

4. The individual does not displace employees of the person providing the training.

[This clearly catches an employer who lays-off an employee and gives their work to an "intern". If that is done, the intern is an "employee".   Does "displace" also cover an employer who retains an  intern  instead of a new"employee"? ]

5. The individual is not accorded a right to become an employee of the person providing the training.

[This creates an incentive for Employers to tell employees that they will NEVER get hired into a real job.  Is that a good policy?  It also means that when the possibility exists for the intern to be hired at the end of the intern period, the person is an "employee".]

6. The individual is advised that he or she will receive no remuneration for the time that he or she spends in training.

[This seems to mean that if an intern is paid anything, then she is an "employee" under the ESA.  An intern is someone who is paid "no remuneration". ]

As you can see, whether or not an “intern” is an “employee” under the Ontario ESA depends on all of the circumstances as applied to these criteria.  The rules would certainly make someone an “employee” if they are retained to do valuable work for the employer that but for the “intern” would have to be done by either an employee or some other paid independent contractor.  The law is intended to exclude from ESA protection only 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 system in which employers can get cheap or free labour.

I suspect there are a lot of employees in Canada being improperly called “interns” by their employers.  Are you one of them?

Does anyone have any thing to add about the treatment of unpaid interns under our laws?  Have I missed something?

Socialize

25 Responses to Are Unpaid Interns Illegal in Canada?

  1. Ryan Reply

    September 27, 2010 at 12:20 pm

    If there was any sort of misunderstanding or ambiguity about the terms of the internship, plaintiff’s counsel could always try a claim for quantum meruit.

  2. Terence Reply

    February 24, 2011 at 8:02 am

    I am an ‘intern’ and I am being compensated $100 a week ($20 a day) for 9-5 work. I have no guarantee of employment when the 3 months is completed and I am provided getting no academic credit. Something about my internship makes me feel taken advantage of. Is my situation a violation?

    • admin Reply

      February 24, 2011 at 9:27 am

      Terence, I don’t give out legal advice on this website. I also don’t know where you live or what laws apply to you. But you begin by assuming that if an employer permits you to work, then the minimum wage and other requirements in employment standards legislation apply. The employer would have to be able to point to some exception in the legislation that applies to you. There is no general exception, at least not in Ontario, that applies to a category called “interns”. See my blog entry for more details. In Ontario, for example, the fact that you are being paid seems to indicate that you are “an employee” and entitled to ESA coverage.

  3. jackie Reply

    May 16, 2011 at 3:35 pm

    mu daughter is not going to college or university . She was approaed by a media company to be an intern with them. no pay, no time frame discussed. she has been there for several months, sends out emails for them, answers the phones and goes to events for them which cost her for cabs etc…she is also required to have her own lap top and was recently asked to get her own blackberry for use at the company. I feel she is basically working for free. There does appear to be a structured intern program of any sort but they keep telling her if she works hard they might have something for her. It is interfering with her part time job that she needs to pay rent and buy food but she insists this will be the job of her dreams some day. do you think she is being scammed?

  4. Thomas Reply

    June 27, 2011 at 5:02 pm

    I was in an internship a few years back. The next intern was lined up the day I left. They are probably still doing it. Is there anywhere I can report this?!

  5. Jason Reply

    July 6, 2011 at 5:54 pm

    Hi Thomas,

    Try calling the Ministry of Labour’s Employment Standards Information Centre. They write on their website that it’s better to phone than to email.

    http://www.labour.gov.on.ca/english/feedback/feedform.php?source=es

    All the best,
    –Jason

  6. Mark F. Reply

    August 14, 2012 at 11:34 am

    I keep coming across “internship” postings and wonder if they are legal. They read like a job posting with a detailed list of skills and educational requirements then the hammer falls – no pay.

    Here is the latest example.
    http://talentegg.ca/employer/women-in-leadership-foundation/jobs/web-internship/

  7. Chanelle Reply

    October 28, 2012 at 11:05 pm

    I have a Master’s degree and because of the field I am in I now need a two year hands on training (internship) before I can either open my own business or be able to testify in Court as an Expert Witness. I get that. However because of the nature of the field and what the two year training requires, somehow I feel as though I should be paid. I mean two years is a long time to do something for free when there are other responsibilities I am faced with. What I am trying to find out is this: although the two year training is MANDATORY (and the employer knows that), is there a possibility that he/she still may be required to pay me? Any advice or numbers I can call? Thanks.

  8. Andrew Langille Reply

    October 30, 2012 at 3:06 pm

    Hi Chanelle,

    I’m doing research on unpaid internships and would like to speak with you. You can email me at andrewlangille@gmail.com.

    Regards,

    - Andrew Langille

    • Sarah Worfolk Reply

      May 20, 2013 at 3:18 am

      I am also doing a second internship after completing a Hospitality Management Program @ Vancouver Career College. The current internship, the employer did not fill in the forms to WCB, or were in contact with the schoolas I initiated it. I was told when I applied for a position that they did not feel I could handle the position ( night baker) although I have held a similar position and they hired a much younger, less experienced girl from China. I was told by family members that they were taking advantage of me and should discontinue the internship. The company will be continuing to bring in unpaid interns to do the work as they do not want to pay the extra cost for an employee. This is frustrating especially when you are trying to restart your career and hopefully get a Pastry apprenticeship.
      I hope this is information that you need to help stop employers from using interns as a type of slave.

  9. Peter Reply

    November 30, 2012 at 5:20 pm

    Great article David and very timely for our mid-size software company. Over the past few years we have had a hard time finding qualified software developers and decided to consider fresh graduates. During interviews it became evident that the gap is just too great between what universities teach and what our company needs. We considered establishing unpaid 3-6 month internships with a formal training schedule and with the goal of hiring the intern(s) at the end. I called our company’s law offices (external) and they told me that unpaid internships are fine, in fact they also do this with graduates from law school. They are obviously mistaken. Having found your article I wanted to double check and called the ESA office. They told me that in fact any unpaid internship is illegal in Ontario unless it is through some type of accredited school.
    The crazy part is that we cannot have an internship established even when hoping to hire the intern at the end of the internship period.
    We do not want to exploit people and have real need for educated AND trained on the job professionals. We offer highly paid, high tech jobs with over 90% of our revenue generated from exports. It is really too bad that our company is forced to create these internships and the resulting jobs in the USA.

    • Rob Reply

      May 8, 2013 at 3:48 pm

      Peter,
      That is why young inexperience people are paid minimum wage or entry level wages. You pay them less ( as in Market rate for their limited experience and expertise) and invest time to train them to become great employees. Would you have worked for free? It is a bad trend that is happening, expecting young people to work for free and frankly exploitive.

    • Michelle Reply

      September 18, 2013 at 9:44 pm

      Hi Peter,

      While it costs more than 0$, have you considered hiring someone and having them undergo a 3-month probation/training period? This is how things used to be. Sure you take your chances that you had to pay someone minimum wage for 3 months with the potential of letting them go at the end, but investing in the training and future our our youth is something that Canadian companies seems to take no interest in. I find this morally-distasteful. Human beings are more than units-of-potential-profit.

      Cheers,

      Michelle

  10. Shola Reply

    February 14, 2013 at 2:37 pm

    I am new(January) to Canada and my university requires me to go for a 4 month internship beginning from may and this is not up to a six months stay required for a permit to work.Can I get a permit to work from the Government under these circumstance and what are the requirements for this to work.This is because most of the companies require it before offering a placement.

  11. joe Reply

    April 15, 2013 at 6:24 pm

    Simple to those looking for “Free” interns. Most likely wealthy as it is. Maybe try paying your interns at least minimum wage regardless, to be an honourable company, and quit focusing on your bonus for once.

  12. Minimum slave Reply

    May 13, 2013 at 2:38 am

    I thought you might like to see this ‘internship’ ad. They are looking for multiple interns, paying a $500 honorarium, may hire the right intern at the end of the time period (left unsaid how long) and are giving interns the ‘opportunity’ to get their work published.

    This seems like a classic case of a case of employment that would break the ESA. Your thoughts?

    “We are a media publishing firm that services the information technology, government, life science, laboratory, and defence markets.

    This is a full-time position from Monday-Friday between 9 a.m. and 5 p.m. We offer a $500 honorarium per internship. There is a possible opportunity for full-time employment for the right candidate(s) after the internship term.
    Qualifications

    The candidate must have strong research, interviewing, writing and social media skills and be able to meet deadlines. Candidates should have a good grasp of CP Style, and some form of post-secondary journalism training at the college or university level.

    This position offers plenty of hands-on experience, with opportunities for published articles.

    Only those candidates selected for an interview will be contacted.”

    • admin Reply

      May 13, 2013 at 3:12 am

      Minimum Slave, is this an Ontario governed ad, it is a blatant violation of the ESA. If the job pays anything or promises possibility of employment it is a job governed by ESA. Who’s the employer?

  13. Minimum slave Reply

    May 13, 2013 at 3:56 am

    Yes, it is an Ontario governed ad. The employer is an Ontario communications company. I think I may apply for the job and include as my ‘writing sample’ a mock article about employer abuse of internships.

  14. Minimum slave Reply

    June 19, 2013 at 3:52 pm

    Any thoughts about this job post?

    http://www.jeffgaulin.com/jobs/JobDetails.asp?id=11737

  15. Flyer Reply

    July 4, 2013 at 8:38 am

    I don’t know where I fall in this mess of rules. Here’s my situation: I’ve been in an Ontario College studying Corporate Communications and Public Relations.
    In order to complete my college degree I needed an internship and to complete some tasks about which I write a journal and fill in a table indicating what learning objectives these tasks fulfilled. I did complete all the work, but nobody trained me or gave me feedback on it. However, because I needed this to complete school, that seems to make me an intern and disqualify me from those 6 rules that turn an intern into an employee. BUT

    1. During the interview, I was promised a stipend (undisclosed amount)
    2. During the interview it was suggested that there would be a job available basically for me to lose.
    3. I was asked to commit to three months instead of two (sounds like the probationary period of a new hire).
    4. I received no training. Was put to work on a project where my work benefited the company. They may even have billed my hours to their client.
    5. Some weeks into the internship I asked my supervisor how I was doing. She said “Oh yeah, fine, excellent.” Bit of a brush off. During this time work trickled to nearly nothing, and I had little to do.
    6. Then they fired my supervisor about a month and a week into the Internship, and the two partners running this company let me sit for days and even weeks on end with literally no work.
    7. When I asked for more work, so as to prove myself to them (still hoping at this point that I may get a job), I got a project a week later that I finished in 2 days, and another project that I worked on for less than a week. I submitted the work but, I never got any feedback whether it was good / bad or what I should do.
    8. With 2 weeks remaining in the 3 month internship they ended it and said they wouldn’t hire me. Reason being my work was not good enough for their type of business focus and couldn’t really be billed to clients. This was almost a blessing, because I was getting so frustrated sitting at my computer trying to come up with work. I even made a proposal comparing some services that may help the company, but nobody got back to me on that. The reasoning behind ending it early was I had three days off that week anyway (had asked for permission to attend a conference just to get me out of the office-of-no-work), and the next week their office was changing locations, so what would be the point of me coming in.
    9. When they dismissed me, they only said my work was not up to par to get hired. I asked for feedback and got vague generalizations. Perhaps if they had given me training instead of ignoring me the whole time, my work could have improved. But as it stands I don’t even know where the deficit was.
    10. My conclusion with all this is that they were using the Internship as a recruitment platform. They had no intention of teaching me anything, training me on anything, and if they didn’t even have enough work beyond one month, why bring me in? I turned down two other Internships for this. They may have been valuable learning experiences. By now, I feel that I was lured with the promise of a stipend and the possibility that I may earn a job there. I feel robbed of a proper Internship because I learned very little, other than experiencing some of the work people in my field do. I was largely ignored. Thankfully, before they fired my supervisor, I got enough tasks done to qualify for my College Diploma. Now I’m a month behind all my classmates getting to the job market.
    If I could have contributed daily, and up to the end I wouldn’t feel so bad. But much of it was a waste of time.

    AAND, I wonder if my internship placement took away a paying position, because I noticed entry level people (young looking) getting interviewed a day or two before they dismissed me. I suspect they went and hired a replacement soon after I left.
    Now, I’ve asked for my stipend by email and am getting no response. I don’t even know how much they will deem to give me (noblesse oblige is so unpredictable). Actually, I feel they will probably reneg on that promise, so that nobody can accuse them of paying me. That will assure I cannot go through a complaints process.

    So, all of this is unfair, I think any reasonable person would agree. The question is, do I have a case to complain to the Ministry of Labour, or to even sue them for, I guess, minimum wages for all hours I spent at my desk working and later wasting time.

    Thanks for any advice.
    Flyer

  16. Pingback: Unpaid Internships: Drawing a Moral Line | The Day Job

  17. hopper writer Reply

    August 17, 2013 at 1:22 am

    Therefore, the state is trying to write a law that protects against the first two “bad” aspects of internships while permitting the third “good” aspect. Try writing a law that does that!

    I’m glad you and the state are seeing both sides of the story. In my case, I’m already well educated and yet under-experienced. It is too time-consuming to go back to school to get even more skills so I’m working as an unpaid volunteer. While the company has no money or income it is still officially profit-making. By that and other definitions — the work is highly beneficial to the company and I’m being promised work eventually — my work is illegal. How to deal with that?

  18. Friend of interns Reply

    August 22, 2013 at 5:44 am

    Also interesting to keep in mind is that national broadcasters are federally legislated, not provincially, meaning that (currently) they aren’t bound by provincial employment acts- so for people pursuing media internships – particularly in broadcasting – the definition of “Internship” is inevitably a bit looser. Choose your placement wisely, have clear learning goals and only commit to internships you feel you will truly benefit from. No one is forcing you to be there :)

  19. fgvb Reply

    August 23, 2013 at 11:57 pm

    Internships are little more than free labour and should be illegal

  20. Chris Reply

    March 19, 2014 at 7:54 pm

    Honestly, I think it depends on what’s happening.

    I am planning on taking an intern, but in the field I am in you can only get on the job training by working, so I’ll be paying minimum wage for three months to see how things go.

    That said, if I had the option to simply provide training, without the intern actually doing any work but really learning, I don’t see what’s wrong with that.

    The only reason I’d feel uncomfortable is if I were making money off of the intern, and not paying them

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