Ontario’s Ministry of Labour Targets Employers Using Unpaid Internships

From April to June 2014, the Ontario Ministry of Labour is conducting an employment standards inspection blitz targeting organizations that employ unpaid interns. The goal is to ensure worker rights are protected and enhance employers’ awareness of their responsibilities.

The law

Ontario’s Employment Standards Act (ESA) does not mention interns and unpaid internships by name, but employers must understand that the law does discuss them. The Act specifies that an employee (a person that receives wages for services or work performed or offered to an employer) includes a person who receives training from an employer. In other words, most people that work for an employer qualify as employees, with two strict exceptions.

One, a person who meets all of the following 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.

However, we have seen over the years that many, if not most, employers using unpaid interns do not fit these exceptions. If they do not, they must pay their interns.

Enforcement blitz into illegal unpaid internships

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, the use of illegal unpaid interns has continued. Although the Ministry of Labour and Statistics Canada do not have data on Canadian internship programs, according to a Toronto Star article, there are an upwards of 300,000 unpaid internships in Canada and 100,000 of them are off the record with no workplace safety training.

Advocates and opponents of unpaid internships, including lawyer Andrew Langille on his blog Youth and Work and on Twitter @youthandwork, have been calling on the Ministry of Labour to stop the illegal practice. Several complaints were filed and finally the ministry is acting.

Businesses across a variety of sectors known for having unpaid internship programs, such as marketing/public relations, software development, retail, media, film, entertainment are being inspected through a proactive enforcement blitz to check compliance with core ESA standards.

The Ministry of Labour took action on two big known offenders before the enforcement blitz, inspecting Toronto Life (published by St. Joseph Media) and The Walrus magazines. The ministry found that these magazines’ unpaid internship programs failed to meet Ontario’s employment standards; they were not approved internship or co-op programs associated with post-secondary schools and the interns were being used in place of paid workers. Inspectors issued compliance orders for violations of several standards: wage statements, record keeping, minimum wage, public holiday pay and vacation pay. This means that, pending any appeal, the workers involved have to be paid.

Instead of modifying these programs to fit the law, these magazines promptly responded by shutting down their internship programs and kicking all their interns out the door. And news of the ministry’s action spread quickly, with companies like Rogers (Flare and Chatelaine magazines), Canadian Geographic, Quill and Quire, Fashion, The Grid and others shutting down their internship programs as well. Generally, they are claiming that they lack funds to pay interns.

From the interns’ perspective, many are saying that these unpaid internships are not meeting their intended goal, which is to provide the skills and experience they need in a required field and references to get a job. Rather, they say that employers are taking advantage of them and they are often doing menial work that has nothing to do with the training they expected or require.

What should be done?

Though late in coming, the Ministry of Labour’s enforcement blitz is a good step forward. But more needs to be done. Employers wanting to establish internship programs should not be relying on exemptions in the law as a guide. The Ontario government needs to amend the Employment Standards Act to directly mention interns and internship programs and establish clear guidelines for employer-intern relations and to help interns and employers understand their rights and responsibilities.

There is little doubt that internships can provide valuable experience and vocational training at the start of a person’s career or during a transition, but it is crucial that employers meet the legislative criteria and refrain from misusing their interns. It is not only an issue of pay, but also working conditions. A person who does not qualify as an employee may not be protected by other employment standards such as those respecting workplace health and safety. This is unacceptable.

The enforcement blitz in unpaid internships continues, and we look forward to seeing the overall results after June 2014, and how the ministry intends to respond.