Unpaid Internships: What does the Employment Standards Act say?

The Employment Standards Act, 2000 is the primary statute in Ontario dealing with work and employment.  In terms of internships, there is currently no legislation that deals with this subject exclusively, or any other type of unpaid work venture.  In order for a worker to be protected by the ESA, an individual’s experience must fit within the confines of the law.

Two interrelated problems arise from the current wording of the ESA.  Firstly, an individual is only afforded the rights and protections of the ESA if he/she can be classified as an “employee”.  There are defined exemptions from the Act, essentially creating a vacuum.  The second problem is an extension of the first and is an issue of misclassification with respect to “intern” as opposed to an “employee”.  Irrefutably, there is a clear gap in current legislation with respect to unpaid internships. 

Unpaid internships in Ontario are illegal per se.  However, an unpaid internship is deemed to be legal if it falls within any one of the exceptions under the ESA at section 3(5).  The first two of which are: 

1. A secondary school student who performs work under a work experience program authorized by the school board that operates the school in which the student is enrolled.
2. An individual who performs work under a program approved by a college of applied arts and technology or a university. 

Along with these exceptions, the Act further states at s. 1(2) that for the purposes of defining an “employee” under the Act, a person receiving training from an employer is considered an employee unless all of the following 6 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 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.
4. The individual does not displace employees of the person providing the training.
5. The individual is not accorded a right to become an employee of the person providing the training.
6. The individual is advised that he or she will receive no remuneration for the time that he or she spends in training. 

It is from these sections of the ESA that unpaid internships become legal under the law.  If an internship does not fall within the exceptions as described in s. 3(5) and s. 1(2), then the individual must be paid for their work.  Individuals who are not considered to be “employees” under the act are effectively not covered by or protected by the ESA.  This creates a gap in legislation in which a large proportion of young workers could be missing essential protection under that law related to work.  Such an archaic system reminds us of times past before employees were afforded statutory protections and were forced to work long days, in unsafe environments.  Essentially this is a reality for many individuals seeking workplace experience in unpaid internships.

The second issue that arises from the definition of “employee” and the exceptions from the ESA, is that of employers misclassifying positions as “internship” positions as opposed to “employee” positions.  From an employer’s point of view, by classifying a position as an “internship” they may believe that they have done their due diligence and that the internship is excluded from the ESA.  However, this is not true.  In many situations, simply calling a position an “internship” does not make it one. 

The Ministry of Labour conducted an enforcement blitz in the spring of 2014, focusing on industries known to hire a high proportion of interns.  The results of the blitz are telling with respect to misclassification of positions.  Of the 56 inspections made, 13 employers had internships with contraventions and of those 13 employers, 37 compliance “tools” were issued, including 36 compliance orders and 1 order to pay wages.[1]  This tells us that a significant number of individuals were misclassified in their current positions as interns as opposed to employees.

Conclusion:           

In sum, the future of youth and young workers looks bleak based on the current wording of the Employment Standards Act.  Exceptions to the ESA abound, but in many circumstances are misapplied by employers.  In many circumstances, an unpaid internship may prove to be attractive for young individuals looking to enter the workforce.  However, the possibility for exploitation proves these opportunities to be less than desirable.  Further, while hiring an “unpaid intern” may look appealing to an employer, more often than not, that position is likely more akin to an employment relationship and that employer may find themselves in trouble  for failing to abide by the ESA.