The paid versus unpaid internship debate has intensified in the Ontario business community as the Ministry of Labour cracks down on internships that violate the Employment Standards Act, 2000 (ESA). Meanwhile, employers face continuous pressure to cut costs and stimulate economic growth, making unpaid internships ever more appealing. But can they really help businesses achieve results?
Unpaid internships have been common among both public and private organizations for decades, especially in tough economic times. But, economic uncertainty and budget constraints should not be allowed to compromise employment equity and fairness, internships or otherwise.
In Ontario, both paid and unpaid internships are regulated by the ESA, which stipulates that if a person performs work for another person or an organization, they are considered to be an employee; the term “intern” is essentially irrelevant. As employees, interns are entitled to ESA rights, such as minimum wage, vacation, overtime, and occupational health and safety.
However, there are exceptions for unpaid internships, albeit very limited ones, which are typically restricted to vocational training for college and university students. According to the ESA, an intern is generally considered an employee unless all of the conditions below are met:
- The training is similar to that which is given in a vocational school,
- The training is for the benefit of the intern; the intern receives some benefit from the training, 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 the job of someone else,
- The employer is not promising a job at the end of the training, and
- The intern has been told that they will not be paid for their time.
These provisos have been put in place to protect workers’ rights and to encourage fairness in the labour market. Furthermore, the employment laws related to internships are instituted to prevent the exploitation of the most vulnerable workers, such as young people, people with disabilities, and people who have recently immigrated to Canada.
Bearing in mind the strict conditions related to internships, employers of all types and sizes cannot – legally speaking – benefit from an unpaid intern’s work. So why offer unpaid internships?
Unpaid internships do open up opportunities to gain experience, which may not be available otherwise. They give people with little to no work experience a chance to apply their knowledge and develop their skills in a professional, versus academic, setting. But because the employer cannot benefit from the intern’s activity, the only party gaining anything from the arrangement is the intern.
Ironically, since an unpaid intern’s work is often insignificant and of little or no value to the employer, the intern actually profits very little, at least in terms of adding achievements to their résumé. Moreover, unpaid internships limit opportunities to a certain socio-economic class: only those who can afford to work without pay have the chance to gain experience in this way.
Although unpaid internships may be tempting for both employers looking for an extra set of hands and for budding professionals seeking any chance to get a foot-in-the-door, they are not typically mutually beneficial.
Paid internships, however, offer a fair and equitable way for those striving to transition and/or integrate into the workforce and get the experience needed to launch their career. Employers can also fully leverage the knowledge and skills that interns have to offer, which support the achievement of business objectives.
Ultimately, interns that are given meaningful, real-world projects are able to invest in their own professional development, while contributing to the employer’s bottom line.
The business case for investing in paid internships is evident; employers that pay their interns take on a highly-motivated, talented, and effective team member, rather than a potential liability. Similarly, interns who are given the chance to gain practical experience that fast-tracks their professional advancement, can become taxpayers, not tax burdens. This becomes a win-win-win situation, for employers, for interns, and for the benefit of Ontario’s socio-economic wellbeing.
To learn more about leveraging paid internships in your organization, visit www.careeredge.ca.