Student Internship Can be a Win-Win for Employers and Students if Done Right
It is often said that there is no substitute for experience. Student internship programs allow students to gain valuable experience, develop transferable skills, and network with professionals. In return, employers can benefit by being able to select, train, and influence their potential future workforce, reduce workload, and retain fresh and diverse talent for new insight and ideas. There are undoubtedly mutual benefits. However, before setting up an internship program or hiring interns, employers must be aware of their legal obligations under Ontario’s Employment Standards Act, 2000 (“ESA”).
STUDENT INTERNS CAN BE “EMPLOYEES” FOR THE PURPOSES OF THE EMPLOYMENT STANDARDS ACT
In most cases, a person who performs work for an organization is an employee. As an employee, he or she is generally entitled to all of the rights under the ESA including the right to be paid minimum wage. There are some exceptions (discussed below), but they are very limited. Unpaid internships are illegal under Ontario law unless they fall within an exception.
PAYING STUDENT INTERNS
In recent years, there have been a number of reports that suggest that unpaid internships in Canada are on the rise.
Unpaid internships are illegal unless the internship falls under one of the three narrow exceptions listed in the ESA:
1. Internships that are part of a program approved by a secondary school board, college, or university
2. Internships that provide training for certain professions (i.e. architecture, law, public accounting, veterinary science, dentistry, optometry)
3. Internships that meet all of the following six conditions required for the intern to be considered a “trainee”:
a. The training is similar to that which is given in a vocational school;
b. The training is for the benefit of the individual;
c. The person providing the training derives little, if any, benefit from the activity of the individual while he or she is being trained;
d. The individual does not displace employees of the person providing the training;
e. The individual is not accorded a right to become an employee of the person providing the training;
f. The individual is advised that he or she will receive no remuneration for the time that he or she spends in training.
In addition, simply giving a worker the title of “intern” does not shield the employer from meeting statutory minimums outlined in the ESA.
If the internship does not fall within any of these exceptions, the intern must be paid at least the Ontario minimum wage of $10.30 per hour for students if under the age of 18 and work less than 28 hours a week or $11.00 per hour at the general rate. (Visit the Ontario Ministry of Labour’s website for more information – http://www.labour.gov.on.ca/english/es/pubs/guide/minwage.php).
CONSEQUENCES FOR NON-COMPLIANCE
A recent article by The Toronto Star (“the Star”), reported that “nearly 42 per cent of businesses with internships were found to be breaking the law in a recent inspection blitz.” According to the Star, the “proactive enforcement blitz” conducted by officials from the Ontario Ministry of Labour resulted in 37 compliance orders and $48,543.00 in fines and orders for back pay.
The Ministry of Labour has also reprimanded high profile companies such as Bell Canada, and two media outlets: The Toronto Life and The Walrus. Bell Canada cancelled its extensive unpaid internship program, known as the Professional Management Program, after former interns at the telecom company initiated a federal labour dispute, seeking wages on a retroactive basis back to 2012.
Along with financial consequences, non-compliance can affect an employer’s reputation and brand.
Employers are encouraged to assess their internship programs to ensure compliance with the ESA.
Feel free to contact our office for more information or assistance.
Article written by: Abira Balendran
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