Nothing is FREE! Not Even in FREETOWN! – Legalities of taking up free internship
Internships are paid and unpaid positions offered by organizations for students to gain hands-on experience in a particular industry. Internships are both a learning experience and a way to build your resume by gaining practical experience in your chosen field; particularly now that summer is coming, many people who are seeking summer internship placements and recent graduates seeking practical experience in their chosen fields are applying for internships in their chosen fields as a way to build their resumes.
Federal labor standards for interns and student interns states that to be considered a student intern in a federally regulated industry or workplace, you must meet all of the following conditions:
- you are not an employee
- you are performing activities for an employer with the primary purpose of gaining knowledge or experience
- you are enrolled in a valid secondary or post-secondary educational institution, vocational school or equivalent institution outside Canada
- you are undertaking the internship to fulfill your educational program requirements
- you provide the employer with required documentation before the start of your internship, supplied by your educational institution. This includes a description of the activities that will fulfill the requirements of the program and contact information for a person responsible for administering the program.
The Employment Standards Act (ESA) applies to employees. The term “employee” is defined in Section 1 of the ESA. In general, independent contractors, interns, volunteers and other individuals who don’t qualify as employees are not covered by the ESA. Employed individuals may have access to benefits such as:
- minimum wage
- overtime pay
- public holidays
- vacation with pay
- notice of termination or termination pay
Under the ESA, employers are not allowed to treat employees as if they are not employees. If an employer misclassifies an employee in this way, an employment standards officer can issue a notice of contravention that results in a penalty, a prosecution or both against the employer.
Rizzo & Rizzo Shoes Ltd. (Re),  1 SCR 27atpara. 36., Provincial employment laws were adopted with the goal of preventing the exploitation and abuse of workers who are in a vulnerable position relative to their employers. The Supreme Court of Canada has held that provincial employment laws should be construed and interpreted in a “broad and generous manner” because they provide minimum benefits and standards to protect workers.
Re Telegram Publishing Co. Ltd. and Amm (1977), 77 DLR (3d) 369 (Ont. Div. Ct.) at 377.Courts have commented that provincial employment standards laws tend to define “employee” and “employer” in a vague and circular manner.
There is a perception among some legislators in Canada that unpaid internships exploit young, inexperienced workers. Among many minimum employment standards spelled out by legislators are minimum wages, holidays, and hours between shifts. Across Canada, the government has also set rules for determining when internships must be converted to regular jobs.
Professional interns are exempt from employment standards legislation in British Columbia, Alberta, Ontario, New Brunswick, Newfoundland and Labrador, and Nova Scotia. Legal, accounting, medical, engineering, dental, and architectural training is generally subject to certain employment standards (such as minimum wage) but not to others such as hours of work, holidays, and overtime. As far as the law is concerned, trainees are not considered employees. There are also laws regulating them as professionals. An engineering-in-training in Alberta, for example, is regulated by the Engineering and Geoscience Professions Act.
EXCEPTIONS TO THE PAYMENT OF WAGES
An unpaid internship is unlawful in Alberta unless it falls into one of the three carefully construed exemptions listed in the Employment Standards Code:
- Internships that are part of a formal course of training approved by the Director of Employment Standards;
- Internships that are part of an off-campus education program approved by a school district’s board of trustees; and
- Internships that are part of a work experience program approved by the Minister of Enterprise and Advanced Education or the Minister of Human Services.
The Code provides that interns who do not fall within these narrow exceptions are entitled to minimum wage payments. In addition to minimum wage and overtime, other employment standards also apply, such as working hours and vacation.
An employee’s status as an “intern” has no bearing on whether he or she is protected by the Code. As the above exemptions illustrate, employers cannot unilaterally designate an unpaid worker as an intern. Before such a designation can be granted, the Director, school board, or minister must approve it.
In certain fields such as doctors, lawyers, nurses, engineers, and accountants, many employment standards do not apply, including minimum wages, work hours, overtime, and rest periods. Due to the fact that such professionals are not ordinarily covered by the Code, the Code does not apply to them when they are undergoing training in their designated fields.
If an employer offers internships without the Director’s approval, or that haven’t been approved by a school district or minister, they should review their program and practice to ensure that they are following the Code. Even though there are no legal repercussions associated with using the word “intern” or “internship” to describe temporary, entry level positions in such instances, employers should be aware that a legal point of view holds that such interns likely have the same Code protection as the rest of the company’s employees. Employers should, however, ensure that even if the internship is approved, proper documentation is completed between the employer, the approving body, and the intern to cover respective responsibilities, including who will provide Workplace Safety Insurance.
Under the ESA, volunteers do not qualify as employees. However, just because someone is referred to as a “volunteer” does not automatically qualify them as employees. Volunteers and employees are classified according to how much:
- the business (or person) benefits from the individual’s services
- the individual views the arrangement as being in pursuit of a living
Families run businesses often wrestle with the question of whether services are provided as a way to make a living or for the good of the family. Rather than providing services in pursuit of a living, a person who provides services to family is more likely to be a volunteer. Someone who is not paid does not necessarily mean they are a volunteer. Someone may not be an employee simply because some form of payment was received. Rather than pay wages, an honorarium probably was given.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances by contacting Osuji and Smith Lawyers on 403-283-8018 or email [email protected]
AUTHOR: LYDIA IBOKO