U.S. court suggests many unpaid internships are illegal

Ontario has similar employment rules

by Josh Dehaas

A student on the campus trading floor at the University of Lethbridge (Chris Bolin)

A federal court in New York has ruled that “interns” who worked for Fox Searchlight Pictures on the film Black Swan should have been paid employees because their work didn’t have an educational component. NPR news says, “the decision may have broad implications for students.”

Eric Glatt and Alexander Footman did things like filing, tracking purchase orders and making copies. The judge’s ruling is notable because it says the educational requirement must be independent of school credits or job experience.

The judge considered the U.S. Department of Labor’s position on what may constitute a legal unpaid internship in the private sector. All six of the following criteria must be met for it to be legal:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment
2. The internship experience is for the benefit of the intern
3. The intern does not displace employees, but works under close supervision of existing staff
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded
5. The intern is not necessarily entitled to a job at the conclusion of the internship
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Ontario’s position on unpaid internships is notably similar. Here’s part of it:

Generally, if you perform work for another person or a company or other organization and you are not in business for yourself, you would be considered to be an employee and therefore entitled to [Employment Standards Act] rights such as the minimum wage. There are some exceptions, but they are very limited, and the fact that you are called an intern is not relevant. One such circumstance where a person can work as an intern for no pay concerns a person receiving training, but it has very restrictive conditions. If an employer provides an intern with training in skills that are used by the employer’s employees, the intern will generally also be considered to be an employee for purposes of the ESA unless all of the conditions below are met:

1. The training is similar to that which is given in a vocational school.
2. The training is for the benefit of the intern. You receive some benefit from the training, such as new knowledge or skills.
3. The employer derives little, if any, benefit from the activity of the intern while he or she is being trained.
4. Your training doesn’t take someone else’s job.
5. Your employer isn’t promising you a job at the end of your training.
6. You have been told that you will not be paid for your time.

Another exception concerns college and university… The ESA does not apply to an individual who performs work under a program approved by a college of applied arts and technology or a university. This exception exists to encourage employers to provide students enrolled in a college or university program with practical training to complement their classroom learning.




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