Tuesday, July 17, 2012

Can You Hire Unpaid Interns to Help Your Startup?

It certainly takes a lot of staff to get a business up and running. Along with the full salaried employees, many business owners have turned towards the idea of bringing on unpaid interns as a way of supplementing the staff needs. The Ministry of Labour has very specific guidelines when it comes to bringing these types of workers into your business. The first thing you have to determine is if your intern fits the official definition of an intern.

As classified by the ESA (Employment Standards Act) an intern is “an individual who performs work under a program approved by a college of applied arts and technology or a university.”

A person who falls under that classification is excluded from being designated as an employee and therefore doesn’t have to conform to the ESA requirements for that type of worker. However, there are some possible complications. The ESA defines an employee as one or more of the following:

a)      a person…who performs work for an employer for wages,

b)      a person who supplies services to an employer for wages,

c)      a person who receives training from a person who is an employer, as set out in subsection (2) For the purposes of clause (c) of the definition of “employee” in subsection (1), an individual receiving training from a person who is an employer is an employee of that person if the skill in which the individual is being trained is a skill used by the person’s employees, unless all of the following conditions are met:

a.       The training is similar to that which is given in a vocational school.

b.      The training is for the benefit of the individual.

c.       The person providing the training derives little, if any, benefit from the activity of the individual while he or she is being trained.

d.      The individual does not displace employees of the person providing the training.

e.       The individual is not accorded a right to become an employee of the person providing the training.

f.       The individual is advised that he or she will receive no remuneration for the time that he or she spends in training.”

Obviously, that is a lot to sort through. The best course of action is to contact the Ministry of Labour before hiring an intern to make sure you’ll be in compliance. You might also look into programs where the government will provide funds to your business if you hire a post-secondary student for a 12 week internship.

Strictly speaking, you’ll need to pay for 25% of this person’s salary but the government will step in and fund the rest. This applies only to companies with fewer than 500 employees who have been in business for a year or longer and it is only for improving a company’s e-commerce website.

It could be the perfect way to get a fresh approach for your business!