Careful How you Classify “Interns” – MOL Releases Policy Statement
It is a fact of life for some entering the labour market – the unpaid internship. For young workers, it is an opportunity to gain experience in a desired field. For employers, it is an opportunity to have recent graduates perform necessary work or apprenticeship at less cost all while assessing suitability for continued employment. Perhaps the modern internship is best explained by the following:
With the attention that "interning" has been getting in the media, including by Hollywood (see above) and by the recent HootSuite controversy, the Ontario Ministry of Labour (“MOL”) has taken notice and issued a recent policy statement that clarifies both the MOL's position and that many intern relationships will not be considered as such by the MOL.
What is an Intern?
In order for someone to be a true intern, and not an employee under the Employment Standards Act, 2000 ("ESA"), the individual must be receiving training from an employer in a skill used by the employer’s employees. In addition, all of the following conditions must be met:
- The training is similar to that which is given in a vocational school.
- The training is for the benefit of the intern.
- The employer derives little, if any, benefit from the activity of the intern while he/she is being trained.
- The individual does not take someone else's job.
- The individual is not being promised a job at the end of the training.
- The individual has been told that he/she will not be paid.
In addition, because the ESA does not apply to individuals who perform work under a program approved by a college or university, such individuals can properly be classified as interns and not employees.
While the MOL’s position does not change the law, it is important for employers to note the MOL’s increased focus on these types of issues (and with young workers in general). In industries with young workers or where it is common to have unpaid staff classified as “temps”, “interns” and “volunteers”, the MOL is much more likely (whether through an audit or a staff complaint) to closely scrutinize this issue and issue orders for breaches of the ESA. A finding of employment by the MOL could result in an order to pay minimum wage, vacation pay, holiday pay, etc. that the individual should have received had he/she been properly classified as an employee under the ESA.
In addition, for unionized employers, interns may be found to be employees under a collective agreement by an arbitrator thus entitling such individuals to the benefits of the collective agreement.
Given the consequences of an adverse finding and the potential liability, employers should carefully review their arrangements with interns with a view to minimizing the risk of such staff being classified by the MOL or an arbitrator as employees. The MOL's policy statement is a good place to start.
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