Recent Ministry of Labour Blitz Finds $140,000 Owing to Unpaid Interns

In our article last month, we discussed the growing attention being paid to the issue of unpaid internships in Ontario. Since then the Ontario Ministry of Labour has released the results of a second workplace blitz designed to assess whether employers in the province are in compliance with the requirements of the Employment Standards Act, 2000 ("ESA").

The first heavily publicized blitz on unpaid internships was carried out in the summer of 2014. At that time, the Ministry investigated 56 different employers. Of those, 13 were found to be improperly using unpaid internships. It was found that the individuals in question were employees and entitled that the normal protections that workers receive. In total, the Ministry ordered that $48,000 was owed in unpaid wages, vacation pay and/or public holiday pay.

The 2015 blitz, for which the results were recently released, took place from September to December, 2015. In every respect, this was a much larger investigation. Notable findings include:

• 123 inspections were completed and of these, 77 employers were found to use interns;
• Of the 77 workplaces with internship programs,
  • 41 had programs that exempted interns from the ESA (such as those with specified co-op students),
  • 18 had programs that were in full compliance with the ESA,
  • 18 (or 23%) were issued citations for violations of the ESA; and
• A total of $140,630 in compliance orders for monetary violations was issued. Again, the most common violations related to the fact that the interns' were truly employees, and as such entitled to receive minimum wage, vacation pay and public holiday pay.

Through its latest blitz, the Ministry has indicated that it continues to consider unpaid internships a significant workplace problem. It is further apparent that the 2014 enforcement round was not an isolated event. The 2015 blitz was significantly expanded: assessing many more workplaces and issuing orders to employers to pay a total amount almost three times that of 2014.

The lesson to be taken for employers is clear. If you wish to introduce individuals into your workplace as unpaid interns rather than employees, confirm that in so doing you are in compliance with the requirements of the ESA. As the above data serves to remind, failure to do so may prove costly.

This article was first published on May 16, 2016 on First Reference Talks.