Canadian Employment Law Today

CELT May 29 2013:celt 467.qxd 13-05-15 4:34 PM Page 3 CANADIAN EMPLOYMENT LAW TODAY Unpaid internships a costly risk Employers can find themselves in legal trouble if their interns are doing somebody's job instead of learning ments for the skilled trades, such as plumbing or pipefitting. The law is UNPAID internships — as part of co-op explicit: Unless it is through a univerprograms or partnerships with com- sity or college, unpaid internships for munity colleges and universities — are other functions such as office adminiswell established in workplaces across tration, IT, sales, communications, proCanada. These placement motions or marketing are programs offer tangible unlawful. Other jurisdicEMPLOYMENT value to both the tions vary in their definiCONTRACTS employer and the intern. tions of "work" and Companies recruit more "employees," so in some effectively and students gain skills and interns are legally entitled to pay while connections to help them find that all- in others it is unclear. important first job after graduation. Ontario's ESA also stipulates that However, unpaid internships also unpaid interns cannot legally generate have a dark side. Recent graduates, commercial value. In other words, it is desperate for experience and facing against the law for a business to profit the toughest job market in a genera- in any way from the intern's unpaid tion, are increasingly being lured into labour. As well, an unpaid intern canunpaid internships with promises or not displace a paid employee. It is also suggestions of eventual paid employ- unlawful to offer an intern full- or partment. time paid employment after the internSometimes the employer is just ship ends. Even the suggestion of a unscrupulous and interested only in paid job at the end of the intern period free labour. The business owner or can land a company in hot water with company purposely dangles the the Employment Standards Branch of prospect of a job and then works the the Ontario Ministry of Labour. graduate long and hard before showing her the door at the end of the placeIt is against the law in Ontario ment period. These unethical for a business to profit in any way employers then move on to the next from an intern's unpaid labour. naive young person hoping for employment. A business or organization that vioThis quiet yet highly destructive form of workplace abuse is proliferat- lates any one of these narrowly coning. Unfortunately, few victims com- strued provisions is in contravention of plain for fear of being branded as the ESA and is liable for providing whiners or troublemakers at the start back pay — at the minimum wage — of up to $10,000 to the intern. Employof their careers. In other cases, the employer may be ment standards officers can also reasonably well-intentioned but igno- require employers to reinstate the rant of the fact that, with rare excep- intern as a paid employee. More seriously for offending compation, unpaid internships are unlawful. nies, using unpaid interns can result in How the law defines unpaid internships hefty fines ranging from $50,000 for Ontario's Employment Standards individuals and up to $500,000 for Act, 2000 (ESA), for example, only repeat offenders. allows unpaid internships after graduAll an intern needs to do to instigate ation for vocational training place- an investigation is to lodge a formal | BY DAVID WHITTEN | complaint with the Ministry of Labour. This will automatically trigger an investigation. The amount awarded depends on evidence of how many hours were worked, which is why interns are well-advised to keep careful track of the hours they work and duties they perform. The case for compensation and fines is also greatly strengthened by evidence of tasks performed, value created and promises of employment. How organizations can protect themselves So how should lawyers and HR professionals protect their client organizations from allegations of intern abuse? Companies who use unpaid interns need to be mindful of the risk and thoroughly audit their use of interns to ensure all unpaid placements meet the provisions stipulated by their province's ESA. If the use of unpaid interns is found to fall outside the letter of the law, employers should immediately rectify the issue by offering full payment, including interest accrued, to compensate the intern for her labour. This action will signal that the company's illegal use of interns was not intended to exploit the intern and will lessen the likelihood of fines. From there, protocols for the future use of interns should be embedded in human resource policies and clearly communicated throughout the organization. It is imperative that managers or supervisors in a position to bring an intern into the workplace know both the rules and the risks. The safest approach is simply to ban the use of unpaid internships altogether and pay the minimum wage when such services are required. If unpaid interns are seen as essential or highly valuable by an employer, Published by Canadian HR Reporter, a Thomson Reuters business 2013 Continued on page 6 3

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