by Melissa Reiter
On June 11, 2013, the Southern District of New York court affirmed that unpaid interns are entitled to rights under the U.S. Fair Labor Standards Act, 1938, as amended (the “FLSA”). In a case brought by Eric Glatt, a former “intern” at Fox Searchlight Pictures, against the production company along with several other “interns” who had been working with Glatt on the film “Black Swan,” the court held that the criteria used to determine an employer-employee relationship under the FLSA were met and that the so-called interns working for Fox Searchlight Pictures were actually employees with legal rights under New York labour law.
The win was a significant achievement in an economy where there seem to be few repercussions for the numerous for-profit corporations who take advantage of candidates desperate for work experience. Many students, graduates and job-seekers take on unpaid positions in order to gain a competitive edge in the marketplace. The benefit to these unpaid workers, the corporations argue, is experience; exposure to the industry. Something to put on their résumés to be more appealing to future employers. Many organizations have been more than happy to take on and solicit free labour. And many of the “interns” in these situations have been so desperate for job experience or references to provide to future employers that they have been complicit with a system that is inherently lop-sided. These arrangements are certainly exploitative. But are they legal? Rules similar to those enforced under the FLSA in New York apply in Ontario [and in other Canadian provinces as well].
“Generally people are entitled to be paid for the services they render,” says Nancy Shapiro, a partner at Koskie Minsky LLP, a law firm in Toronto, Ontario, practicing in the area of employment law. “The exception of internships is a very limited one.” The fact that you are called an “intern” does not determine whether or not you are entitled to the protections of the Employment Standards Act, 2000 (the “ESA” - an Ontario act), including being paid minimum wage. If you perform work for another person, company or organization and you are not in business for yourself, you are considered to be an employee entitled to rights under the ESA. There are some exceptions, but they are limited. Even if you are called an “intern”, that does not indicate that you are not legally an employee with ESA rights.
Shapiro explains that in order for an employee not to be entitled to be paid at least minimum wage for the work they perform, the internship must:
a) Be for a secondary school student who performs work under a work experience program authorized by the school board that operates the school in which the student is enrolled (typically known as “co-op” program); or
b) Be for a person performing work under a program approved by a college of applied arts and technology or a university (typically an internship or placement program which forms part of the student’s course work in order to graduate the program).
“If the work is not one of these things you are entitled to be paid,” says Shapiro. “For example, if you are a university student in an undergraduate science program and want to be a veterinarian, you might ask to work at a veterinary clinic for the summer. You are entitled to be paid.”
There are also situations where even if some of the work an “intern” does meets the criteria for an unpaid internship, a worker should be paid for time or responsibilities that fall outside the scope of the approved program. “If you work for a company and part of the time is for school and fits into one of the exceptions [outlined above], but you do other work for the company as well, you are entitled to be paid for the hours of work outside of the co-op or internship,” Shapiro clarifies.
Another important feature of an unpaid work placement for educational purposes is that the benefit must be to the person performing the work – not to the organization hiring the intern. “If the purpose of the placement is educational, the education of the person must be the primary objective with the organization deriving little if any, benefit from the activity,” notes Shapiro, “The training cannot be to displace a paid worker and the person completing the placement will have no right to become an employee after the training completes.”
“If these criteria are not met,” cautions Shapiro, “ensure you get paid for the work you are doing.”
If you or someone you know is performing work as an unpaid intern in Ontario and are unsure of whether your are excluded from the ESA, call the Employment Standards Information Centre toll-free at 1-800-531-5551 for further information.
Melissa Reiter is a corporate/commercial lawyer at Koskie Minsky LLP in Toronto. Her typical day involves anything from working with start-ups to advising some of Canada’s largest pension funds on a wide range of complex commercial and investment matters. Follow her on Twitter @MelissaReiter.