Unpaid Internships: The Good, the Bad and the Legally Murky

The moon, the stars, the flowers in spring. According to Frank Sinatra the best things in life are free. But does this apply to labour? Internships, especially unpaid internships, can be a hot-button issue. Some regard them as a great opportunity for young career-minded individuals, while others see them as an exploitative practice. What are the pros and cons of internships, and what does the law say about it all? Let’s explore.

A Note About Internships

Wikipedia defines an internship as a ‘period of work experience offered by an organization for a limited period of time.’ [1] Of course, not all internships are created equally. Some interns are paid, while others are expected to work for free. Some internships provide valuable learning experiences and industry contacts, while others, not so much. Internships may or may not be affiliated with learning institutions. The norms surrounding internships vary by industry, as does the value one can hope to receive from participating in them.

The Case for Unpaid Internships

An ambitious youngster looking to make their way in a ‘tough to crack’ industry can certainly gain a foothold by participating in the right internship. As we’ve all heard, who you know can be as, or more, important as what you know and interning for the right company or individual can help one break free from the old catch-22 about not getting hired because you lack experience, and not having experience because you can’t get hired. There are certain things that can’t be learned in a book, and internships can allow one to gain valuable hands on experience. An internship can also help one decide whether they are, or are not, suited for a particular industry.

For the organizations doing the hiring, internships can be a valuable source of scouting for long-term talent. Potential future hires can be brought on in a non-committal fashion, and those who prove their worth can hit the ground running after being hired.

Cons of Unpaid Internships

Ostensibly an internship is designed to provide educational and experiential benefit to the intern. In some cases, however, that value is questionable with many interns serving as unpaid grunts. Some view internships as inherently classist, as those of means are better equipped to support themselves during periods of unpaid labour. Those without personal wealth often work second jobs while interning, which can lead to burnout. Compounding the problem, many internships are a mandatory part of educational programs, meaning that many interns are not only working for free, but are actually paying for the privilege.

Are Unpaid Internships Legal?

Legally, unpaid internships are somewhat of a grey area, with ongoing efforts to reform related laws. In Canada, the specifics vary by province but, generally speaking, ‘employers’ are required to pay ‘employees’ unless specifically exempted from doing so. Predictably, this leads to much debate about the exact definition of an ‘employee’. Exemptions are typically given in situations where the internship is affiliated with an institute of higher learning or in other situations where the opportunity can be shown to be beneficial to the intern.

“A rule of thumb states that the internship should be demonstrably more beneficial to the intern than the company.”

It is worth noting that simply having a potential intern sign an agreement regarding the specifics of their position does not overrule the law. [2]

The Liberal government declared their intent to reform regulations surrounding unpaid internships in the 2017 budget but have not yet passed any related legislation, although the issue is slated to be addressed in 2019.

In the U.S., companies wishing to utilize unpaid interns must pass a ‘primary beneficiary test’. Among other things, companies must demonstrate that the intern will receive value that ‘would be similar to that which would be given in an educational environment’ and that they should complement, not displace, the work of a paid employee. [3]

Other Considerations

Responsible companies and organizations should look at their internship programs not only from a legal but also a moral perspective. Those offering true educational opportunity under reasonable terms are often proud to do so. Those with more exploitative practices are not only subject to legal ramifications but also negative PR, which can negate the gains of ‘free labour.’ In situations where companies face complaints, the onus is on the company to demonstrate the value of their internship program. If there is doubt, the more prudent avenue is to pay interns a salary that meets or exceeds local minimum wage standards.

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Alessia Pagliaroli

Alessia takes a consultative approach with all her placements. She feels that, as a recruitment specialist, she is the “eyes and ears of the market” for both the client and candidate. She enjoys bringing value to her clients by being completely transparent, knowing the industry, and providing a competitive point of view.

Senior Recruiter at Goldbeck Recruiting Inc.