It’s time for the Ontario government to act on unpaid internships.

What if the citizens of Caledon (pop. 59,460) were forced to exist without wages? There would be an outcry and the economic, social and political repercussions would reverberate around the province. This isn’t a hypothetical question; rather it’s a reality for the tens of thousands of young workers who are being illegally misclassified as unpaid interns in Ontario each year.

Many unpaid interns are illegally denied wages, forego Canada Pension Plan, Workplace Safety and Insurance Board and Employment Insurance contributions, and don’t pay income tax. Unpaid internships have a deep impact on the economy as paid employees get replaced with unpaid interns, youths delay major life events, wages are driven down and young workers are forced into a cycle of precarious employment.

Unpaid internships also raise equity concerns. These positions predominately target young, female workers, and reduce social mobility by blocking youths from lower socio-economic classes (who have a reduced ability to engage in unpaid labour) from being able to enter key professions in Ontario’s society.

Despite a raft of complaints about illegal unpaid internships appearing in the media in recent months, Ontario’s Ministry of Labour (MOL) has refused to take any concrete action to address one of the most poignant examples of employee misclassification and wage theft in modern Canadian history.

We believe this must change.

The costs of unpaid internships for youth, public revenues and the economy more broadly are simply too great to ignore.

Ontario has a fairly strict set of guidelines governing the use of unpaid labour. All employees in Ontario are entitled to the statutory minimum wage, except for those falling under three exclusions within the Employment Standards Act, where an unpaid internship would be considered legal. Students doing an unpaid internship as part of an academic program are completely excluded from the ESA, and persons completing professional training in an enumerated profession such as law or architecture are excluded from critical protections related to minimum wage, overtime and hours of work.

The most important exclusion allows employers to place persons completely outside the protections of the ESA if they meet all of the conditions of a six-part test. The constituent parts of the test are: the internship must be similar to a vocational school; the internship must benefit the intern; the employer can derive little, if any, benefit from the intern during the internship; the intern cannot replace a paid employee; the intern cannot be accorded a right to employment; and, the intern cannot be paid.

The overwhelming majority of non-academic unpaid internships in Ontario do not adhere to this six-part test and are illegal.

Despite this fairly stringent legal regime, the law on unpaid internships is widely disrespected since enforcement of the ESA is complaints-based. It is well-recognized that current, non-unionized employees face large barriers to enforcing the ESA, and rarely file complaints. These barriers are even greater for unpaid interns, for whom a complaint would mean lost reference letters and connections, and the risk of being “blacklisted” in their industry.

The MOL must begin to proactively enforce the law on unpaid internships. This approach is necessary as the current complaint-based system is failing to protect young workers from wage theft, misclassification and rampant abuse.

We recommend the MOL take the following actions.

First, the MOL must develop an enforcement strategy to address illegal unpaid internships. This strategy must include inspection blitzes, updated enforcement techniques to address the advertising of unpaid internships on the internet and the development of an anonymous tips hotline.

Second, the MOL must develop an educational campaign to inform young workers, students, parents, post-secondary institutions and employers about the laws surrounding unpaid internships. This campaign must include advertising, social media outreach and the development of audience-specific educational materials.

Finally, the MOL must undertake a comprehensive review of the laws surrounding unpaid internships to determine how well they are facilitating the school-to-workforce transition for Canadian youth.

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The status-quo approach of expecting individual interns to stand up against their employers cannot continue. Young workers face a severe power imbalance, fear being shut out of future opportunities, don’t understand the law and are often intimidated if they raise the issue of employment standards. Tens of thousands of youths are being left behind due to unscrupulous employers and inaction from the MOL. This unsustainable situation needs to change, and soon.