Because of the recent controversy surrounding unpaid interns, we have been getting many calls from concerned employers about their obligation when working with interns and employers’ rights when interns do not work out.
As a general rule, unpaid internships are not permitted in Ontario. There are a few exceptions, the most common of which is where the intern is a “trainee”.
To qualify as a trainee, ALL of the conditions below must be met:
- The on-the-job training is similar to training at vocational school;
- The training is for the benefit of the intern and the intern receives a benefit, such as new knowledge or skills;
- The employer derives little, if any, benefit from the activity of the intern while he or she is being trained;
- The intern does not take an employee’s job;
- The employer is not promising the intern a paid position at the end of the training; and
- The intern has been advised that he or she will not be paid for his or her time.
If an employer provides an intern with training in skills that are used by the employer’s employees, the intern will generally not fall under the “trainee” exception.
Another situation where unpaid interns are permitted is where the intern performs work under a placement program approved by a university or college.
Simply agreeing to work without pay does not preclude an intern from later filing a claim against an employer for unpaid wages.
Termination of Employment
If an intern is paid for work performed, the Employment Standards Act (ESA) applies. As a result, ending the internship must comply with the ESA. Employers should have interns sign contracts, setting out a clear (and lawful) termination provision. If the internship is for a fixed term, and if an employment contract with an appropriate termination provision was not signed, an employer may well be found to have to pay the intern what the intern would have earned during the term of the contract, even if the intern is asked to leave before the end of the term. If the term is not fixed and the internship ultimately lasts less than three months, notice will not be required.
Buyer beware – As simple as it may seem, it’s a good idea to call your lawyer before agreeing to let your employee’s niece hang out in the mail room for a few months.