Several years ago, we wrote a blog post on what we termed the “perils” of unpaid internships. The topic was particularly…topical at the time (2014), as the Canadian Press then reported that unpaid internships were “on the rise in Canada, with some organizations estimating…as many as 300,000 people currently working for free at some of the country’s biggest, and wealthiest, corporations.”
Recently, we’ve received a number of questions from employers about hiring volunteers. Given this, and the similar issues that arise with interns and this category of worker, we decided it was time to update our post to cover both these types of free labour.
What’s the Big Deal?
When it comes to unpaid internships, you may ask: “What’s the big deal?”. If the intern is willing, the work is good, and the employment conditions are otherwise favourable, where’s the harm in a short-term, unpaid working relationship which results in valuable industry experience for the employee?
As for volunteering, this can be valuable experience for anyone entering (or returning to) the workforce, not to mention fundamental to the success of certain types of organizations.
Since we’re employment lawyers, our focus in this post will be on the negative legal implications of including unpaid interns and volunteers in your workforce (while acknowledging that the negative socio-economic impacts of such arrangements can also be significant).
Employment Standards Definitions
In BC, the Employment Standards Act (the Act) and related regulations set out employee minimum entitlements to wages, vacation, overtime pay, severance and the like.
Although there is nothing in the Act per se regarding interns, internships or volunteers, the legislation defines the terms “employee”, “employer” and “work” very broadly, such that an employer must be very careful when choosing not to pay a worker. Specifically, under the Act,
- An “employee” includes a person an employer allows, directly or indirectly, to perform work normally performed by an employee, and a person being trained by an employer for the employer’s business
- An “employer” includes a person who controls, directs or employs an employee
- “Work” means the labour or services an employee performs for an employer
If someone meets the above definition of employee, the employer MUST pay them at least minimum wage (subject to certain limited exemptions).
Interns
While there is no definition of intern or internship in the Act, the Interpretation Guidelines Manual which accompanies the Act specifically refers to these concepts.
In commentary accompanying the definition of “work”, the Manual explains that if the definitions of work, employee and employer are all satisfied, an internship will be considered “work” under the Act and therefore must be paid. The Manual also clarifies that a practicum (defined as hands-on training for post-secondary students required by their curriculum and resulting in a certificate or diploma) is not considered “work” under the Act.
Volunteers
Neither the Act nor the Manual contains a definition of “volunteer”.
While BC’s Employment Standards Tribunal has considered the distinction between employee and volunteer in a few cases, most of these “involve employers attempting to disguise employment by calling employees volunteers” (see Shawnee Venables (Re) 2018 BCEST 11).
The recent Tribunal decision in Re Shawnee Venables, however, does provide some helpful guidance for employers (and so-called volunteers). In that case, the Tribunal explained at paras. 28 – 31:
“…The task is to differentiate between individuals who are in fact offering socially valuable volunteer work without any expectation of compensation from individuals who may be exploited by enterprises who mischaracterize the individual as a volunteer to avoid meeting minimum standards of employment.
Any analysis of whether an individual is an employee or a volunteer must consider factors similar to those in determining whether an individual is an employee as opposed to a self-employed contractor can be used…the essence of the search is for the total relationship of the parties: elements of ownership of equipment and degree of control are but two factors to consider. Nature of the relationship is most important.
Volunteers are typically individuals who volunteer their services for civic, charitable or humanitarian reasons, without expectation of pay, and offer their services freely and without coercion. Volunteer services are not usually offered on a consistent full-time schedule; rather, they are required on an “as-needed” basis, and their services are different in scope, duties and expectations from paid positions. Volunteers are often subject to specific conditions, including, for example, criminal record or credit checks, and must be reliable. Volunteers may be offered reimbursement for out of pocket expenses.
The nature of the enterprise is also a factor to consider, although whether the organization is a civic, charitable or non-profit organization is not the only determining factor.”
So, to summarize, the key factors to consider when determining whether an individual is truly a volunteer are:
- Is the work socially valuable and done for civic, charitable or humanitarian reasons?
- Is the person expecting compensation?
- Is the person offering their services freely and without coercion?
- Are their services different in scope, duties and expectations from paid positions?
- Is the person working on an as-needed basis?
- What is the nature of the relationship between the volunteer and the enterprise, when viewed as a whole?
- What is the nature of the enterprise itself?
Takeaways
Ultimately, we recommend that employers err on the side of caution when considering using unpaid labour in their business. To paraphrase an old adage: if it looks like an employee and works like an employee, it probably is an employee.
When in doubt, call your employment lawyer.
Have questions about your employment practices or policies? Email us.
