Protect Your Business from “Free Labour” Pitfalls

Now that high schools and post-secondary students are back in the classroom, many Ontario employers are keeping an eye out for student interns or other co-op students to join their ranks. Internships and co-ops can often be mutually beneficial for both student and employer by:

  • helping the student in gaining that all-important on-the-job experience; and
  • helping companies basically recruit future employees.

It’s hard not to think of this as a win-win scenario. But with recent controversy swirling around unpaid internships – where the Ontario Government recovered nearly $140,000 in wages for past interns – some employers might be feeling uncomfortable when considering taking on a co-op student or student intern. And they aren’t without good reason to exercise caution.

Essentially, according to The Ontario Employment Standards Act, 2000, any student who supplies services or performs work for a company or individual, is considered an “employee.”  It also means that in addition to other Employment Standards protections, interns and co-op students are entitled to receive minimum-wage payment as compensation for the work they perform.

But, all is not lost. In certain circumstances The Employment Standards Act does allow for unpaid student internships or co-op placements. For example, employers are not required to pay student interns or co-op placements if they participate in a work-placement program that adheres to specific criteria.

If a high school co-op placement has been authorized by the responsible school board, then a student who works in your company as a result of that work placement is not considered an ‘employee’ under The Employment Standards Act. The same holds true for a post-secondary student participating in a work experience program that has the approval of their college or university.

And The Employment Standards Act allows for non-student internships to be unpaid if the intern is actively engaged in training and the internships meet all of the below criteria:

  • The on-the-job training must be similar to training available at a vocational school and must benefit the non-student intern.
  • The trainer receives little, if any, benefit from the non-student intern while they are participating in the training.
  • The non-student intern cannot displace any employee of the trainer.
  • Prior to participating in the internship, the non-student intern is advised and understands they will not receive remuneration for the time they spend in training.

Further, the Ontario Labour Relations Board has set out specific requirements for companies with non-student interns. The must provide the intern with:

Formal instruction

  • Evaluation
  • Supervision

In addition, the Ontario Labour Relations Board frowns upon businesses that:

  • Charge customers for intern expertise.
  • Fail to fully document what the intern is learning.
  • Fail to accurately record the intern’s number of instruction hours.

The team at Employment Professionals Canada is experts in the fields of staffing and HR in Ontario. If you are looking for assistance in navigating the ever-changing world of employment updates in Ontario, we’re here to help. Contact us today to learn more about our employment services and expertise.