Unpaid interns can be a minefield for employers

Financial Post | Business

As spring approaches, many Canadian organizations are turning their minds to the subject of summer interns, many of whom are unpaid.

What many employers don’t know is that they risk liability for the entitlements of employment standards legislation, including minimum wage, vacation time and pay, overtime, statutory holidays, and notice of dismissal, if their unpaid interns don’t fit within the exceptions that allow for unpaid labour.

“Contrary to popular belief, organizations can’t simply designate someone as an intern and then expect them to work without pay,” says Natalie MacDonald, co-founder of Toronto employment law boutique Rudner MacDonald. “Unpaid interns are not to be viewed as free labour and can’t effectively replace a regular employee,”

Indeed, the Employment Standards Act in Ontario, like similar legislation in other provinces, specifically includes “a person who receives training” in the definition of an “employee.”

According to MacDonald, a true intern arrangement is one in which:

  1. The…

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