The Ontario Ministry of Labour is presently carrying out
“workplace inspection blitzes” between the months of April and June, 2014,
which will focus on the issue of employer use of unpaid interns. Media reports
have confirmed that as a result of these inspections, Toronto Life magazine and
The Walrus magazine (which is a registered charity), have ended their unpaid
internship programs. Other employers may follow in either ending or modifying
their internship programs in light of this increased attention to the issue.
For charities and not-for-profits, the labour of volunteers is crucial to
achieving organizational goals. However, in light of the increased attention
by the government to the issue of unpaid work, charities and not-for-profits
need to be mindful and aware of the limits imposed by law for unpaid work, and
take appropriate steps to protect themselves from claims that the people who
carry out the work need to be compensated in accordance with employment
This Bulletin will discuss this evolving and important
issue, and will review the Employment Standards Act, 2000 (the “ESA”)
requirements for retaining an unpaid intern, as well as the differences between
interns and volunteers.
B. ONTARIO’S EMPLOYMENT STANDARDS ACT, 2000
The Ontario Employment Standards Act, 2000 (“ESA”)
sets out the rights and responsibilities of employees and employers in Ontario.
Under the ESA, an employer which violates its provisions regarding labour
standards may be subject to investigation, prosecution and possible fines.
Employees cannot waive their rights under the ESA, meaning, for example, that
if an employee is entitled to minimum wages under the ESA, he or she cannot waive his or her rights to receive that minimum wage.
Section 3 of the ESA states that the statute applies to an
employee and employer if the employee’s work is to be performed solely in
Ontario; or if the work is performed in and out of Ontario then the portion
performed outside of Ontario must be a continuation of the work that was
executed in Ontario. With few exceptions, charities and not-for-profits
operating in Ontario will be subject to the ESA.
C. THE ESA AND INTERNSHIPS
There has been recent coverage in the news about the Ontario
Ministry of Labour’s attention to unpaid interns in workplaces, including
charities and not-for-profits. The Ministry’s intention is to protect the
rights of workers under the ESA. Under the ESA, an employer must pay employees
“at least the prescribed minimum wage”.
One way in which the government is enforcing the ESA standards is by conducting
“inspection blitzes” whereby employment standards officers visit employers and
evaluate the employer’s compliance with the ESA.
The current inspections relating to internships are being conducted in the
sectors of marketing/public relations, software development, retail, media,
film and entertainment.
For charities and not-for-profits, these inspections raise the important issue
of ESA compliance with respect to the use of unpaid labour, either pursuant to a
volunteer engagement or an internship.
What then is an internship and who is considered to be an
intern? The answer is not as clear-cut as one would hope. Generally, the term
“intern” has been understood to apply to a situation where a person enters a
workplace to learn a professional skill for a period of time, often (but not
always) with either little or no compensation. The intern may have an
expectation of securing later employment with that organization, or at least
acquire professional skills and experience. However, the ESA does not define
“intern” or “internship”. Therefore, for guidance one must look to the ESA
definition of “employee”. If an individual falls under the definition of
“employee”, then he or she cannot be an unpaid intern and as a result, he or
she must be compensated with at least minimum wage. The ESA defines an
“employee” in section 1 as the following:
(a) a person,
including an officer of a corporation, who performs work for an employer for
(b) a person who
supplies services to an employer for wages,
(c) a person who
receives training from a person who is an employer, as set out in subsection
(d) a person who
is a homeworker,
and includes a
person who was an employee;
As previously mentioned, an “employee” under the ESA must
be paid at least the prescribed minimum wage. There are two exceptions to this
minimum wage requirement. The ESA, and its provisions about minimum wage, do not apply to an individual who is:
· “a secondary school student who performs work under a work
experience program authorized by the school board that operates the school in
which the student is enrolled; [or]
· an individual who performs work under a program approved by a
college of applied arts and technology or a university”.
In addition, if a person receives training from an
employer and the trained skills are used by the employer’s other employees,
this person would ordinarily be subject to the ESA and the provisions about
minimum wage, unless all six conditions set out below are met:
1. The training is
similar to that which is given in a vocational school.
2. The training is
for the benefit of the individual.
3. The person
providing the training derives little, if any, benefit from the activity of the
individual while he or she is being trained.
4. The individual
does not displace employees of the person providing the training.
5. The individual
is not accorded a right to become an employee of the person providing the
6. The individual
is advised that he or she will receive no remuneration for the time that he or
she spends in training.
If all of the six conditions mentioned above apply
to an employee’s situation, then the employer is not required to pay the
In summary, if a person falls under the definition of
“employee” under the ESA, then he or she must receive at least the prescribed
minimum wage, unless the person falls under the exception for secondary school
students, the exception for college and university programs, or the exception
for training. The fact that the person may be called an “intern” does not
matter. It is the definition of an “employee” under the ESA that applies, not
the title of the person’s position.
D. INTERNS AND VOLUNTEERS: IS THERE A DIFFERENCE?
The Ministry of Labour website notes that “volunteers” are
not covered by the ESA. Therefore, volunteers are not employees and can be unpaid. Interns on the
other hand are employees and must be paid at least minimum wage, unless they
fall under the listed ESA exceptions. When then is a person considered to be a
volunteer (unpaid) or an intern/employee (paid)? The ESA does not define
“volunteers” or “interns”. According to The Volunteer Centre, a volunteer is “someone
who chooses to act in recognition of a need, with an attitude of social
responsibility and without concern for monetary profit”.
According to the Oxford Dictionaries, a volunteer is “a person who freely
offers to take part in an enterprise or undertake a task”.
The United Nations defines volunteering as the following: “There are three key
defining characteristics of volunteering. First the activity should not be
undertaken primarily for financial reward. Second, the activity should be
undertaken voluntarily, according to an individual’s own free-will. And third,
the activity should be of benefit to someone other than the volunteer him or herself,
or to society at large.”
E. HOW TO PROTECT YOUR ORGANIZATION
If a person is in fact a true volunteer, then the ESA
requirements would not apply and the volunteer can continue to assist the
organization without compensation. Even with charities and not-for-profits,
there may be a fine line between whether a person will legally be considered to
be an intern or a volunteer. For example, if a person is carrying out a
function that is normally carried out by a paid employee and is paid a small
stipend, there is a risk that the person would be viewed by the Ministry of
Labour as an employee, and not a volunteer. The same result could arise if the
person is training for a possible future paid position within the charity or
not-for-profit. Therefore, to protect your organization from these potential
risks, it must only retain interns who fall within the legal requirements as
mandated by the ESA. Further, the organization should make sure the documents
retaining the intern are clear and well drafted to properly set out the nature
of the relationship. Finally, in retaining volunteers, the organization should
use properly drafted volunteer agreements, which would likewise set out the
nature of the relationship, and the respective roles and responsibilities of
each party. An article about the importance of volunteer agreements can be
found online at: “The Benefits of Volunteer Agreements” http://charityinfo.ca/articles/The-benefits-of-volunteer-agreements.