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There’s No Such Thing as a Free Lunch: Are Unpaid Interns Worth the Price?

hellostickerWhile it is common for many organizations to use unpaid interns, volunteers and/or practicum students to perform important functions, these unpaid positions may in fact truly be employees and can end up costing you much more than you anticipated.

While the British Columbia Employment Standards Act (“ESA”) itself does not specifically define the terms of intern, volunteer or practicum students, the Employment Standards Branch treats each of these categories differently.

Volunteers: Volunteers provide services to not-for-profit organizations without expecting to be paid. If your organization is for-profit, any person who performs work normally done by employees is considered to be an employee, not a volunteer.

Practicum Students: A practicum is hands-on training required by the curriculum of a post-secondary institution, and results in a certificate or diploma. It involves the supervised practical application of classroom theory.

Internships: An internship is on-the-job training to provide practical experience. Unlike practicums, completing an internship does not result in a post-secondary certificate or diploma.

In deciding whether a volunteer or intern is an employee, the Branch will consider whether the individual:

  • expects, or was paid, compensation;
  • performs the same duties as other employees;
  • works set hours; and
  • is subject to the organization’s human resources policies.

As an employer, if you employ a volunteer, practicum student or an intern improperly, you could be liable for back pay, vacation pay and severance pay for that employee. In addition, you could potentially face administrative penalties and common law employment liability.

How should you minimize your risk when considering engaging unpaid interns, volunteers and practicum students?

  • First, assess whether the position should be considered an employee position or an unpaid position. If it is really an employee position, consider a fixed-term or part-time paid position. Also ensure that your employment agreement limits your obligations to the statutory ESA minimums for vacation pay, notice provisions and other relevant terms and conditions.
  • If the position passes the Branch’s test for a valid unpaid position, provide written confirmation of the arrangement and be sure to include that the position is unpaid.
  • Require practicum students to provide proof from their school that the position is required for their education course and to submit proof of enrolment in the program, prior to engaging them.
  • Provide volunteers or interns with flexibility regarding their duties and hours of work. Don’t assign them the identical duties as employees.
  • Do not offer volunteers or interns the same benefits as those offered to employees.
  • Apply only relevant policies (e.g. confidentiality, harassment, privacy) to an intern or volunteer, and not employee-related policies (e.g. vacation, time tracking).

While it can be tempting to seek unpaid sources of labour as a cost-cutting measure, the true cost of such a decision can often be more expensive than necessary. For assistance in determining whether unpaid interns, practicum students and/or volunteers are right for your business, please contact Vancouver-based Clear HR Consulting.

 

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