Monday, April 5

Illegality of unpaid internships

The New York Times ran a very interesting article on Friday about how state governments are starting to crack down on employers who use unpaid internships as a source of free labour (hat tip to William Wolfe-Wylie). It seems with the recession, businesses are using interns as free labour, which violates minimum wage laws.

I know some companies in Canada offer unpaid internships — they're particularly common in the media industry, where many outlets are struggling financially and there is an overabundance of qualified graduates looking to get their foot in the door somewhere. I wonder if these internships violate minimum wage laws here too.

I'm no labour lawyer, but I took a peek at Ontario's Employment Standards Act. It appears to be similar to U.S. laws. You're exempt from minimum wage laws only if you're part of a high school or post-secondary work experience program. Otherwise, unpaid interns have to meet all the following requirements:

  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 training.
  6. The individual is advised that he or she will receive no remuneration for the time that he or she spends in training.
It's clear that many unpaid internships violate these rules and that the employees should be receiving minimum wages. I'm surprised we don't hear more from unions calling on governments to enforce these laws.