In 2014, Ontario’s Ministry of Labour conducted an inspection blitz in connection with unpaid internships.  Of the 56 companies investigated, the Ministry issued 36 orders regarding non-compliance with the Employment Standards Act, 2000.  The inspection underscored the unlawful manner in which unpaid interns are being used across the province.

The default law in Ontario that applies to interns is that a person who conducts work is entitled to be compensated accordingly.  This principle encompasses laws regarding minimum wage, vacation, hours of work, public holidays, notice of termination, and so on.  As a general rule, this means that unpaid internships are illegal.

The Ministry of Labour has stated six rules that apply to unpaid internships, all of which must be satisfied in order to avoid reprimand:

1. The intern must receive training that is similar to that which would be provided in a vocational school;
2. The training is for the benefit of the intern, i.e. through acquiring knowledge and skill;
3. The employer derives little benefit, if any, from the activity of the intern;
4. The intern’s training does not take away someone else’s job;
5. The employer does not promise the intern a job at the end of the internship; and
6. The employer has told the intern that they will not be paid for their time.

Points 2 and 3 are particularly important.  The focus is not simply on what the intern is doing, but also on what they are receiving from the internship.  Similarly, point 6 requires the employer to confirm in advance of the internship that there will be no compensation, rather than remain silent on the point, or confirm at a later stage.

Employers who do not strictly abide by these rules may find themselves liable for an intern’s salary, overtime, vacation pay, public holiday pay, notice of termination, and other employment standards entitlements.

An exception to this rule applies to students enrolled in a program approved by a university or college of applied arts and technology.  When in doubt, the employer should compensate the intern as if they were an employee.

Author: Marc Kitay, Whitten & Lublin