May 16, 2016
Tourism and hospitality employers should be aware of the potential liabilities that could emerge as a result of using volunteers, practicum students and interns in light of the requirements under the Employment Standards Act (ESA). A significant risk arises with the possibility that a volunteer or an unpaid student or intern may claim to be an employee under the ESA. Consequently, the employer would be liable for back-pay with interest, and may be subject to penalties.
As a simple rule of thumb, if an individual is performing “work” as defined by the ESA, s/he must be paid. Accordingly, it is crucial to consider the following:
- Volunteers – if a volunteer is performing duties normally done by employees and/or can reasonably expect to be compensated, s/he is performing “work” and must be paid.
- Practicum students – if a student is performing duties that fall under very narrow and specific exemptions (as described below), the activities may not be considered “work”, and therefore, can be unpaid.
- Internships – if the individual is performing duties or on-the-job training that is designed to provide a person with practical experience, s/he is performing “work” and must be paid.
Important distinctions between volunteers, practicum students and interns are outlined below.
VOLUNTEERS UNDER THE EMPLOYMENT STANDARDS ACT
The ESA is designed to protect the rights of workers; therefore, its provisions have been given a broad interpretation in order to ensure the protection of the statute to the widest possible group of individuals. It does not define “volunteer” and does not explicitly exempt volunteers from the Act.
The definitions of “employee”, “employer” and “work” under the ESA are broad and are designed to be very inclusive. In short, these definitions are as follows:
- an “employee” includes a person an employer allows, directly or indirectly, to perform work normally performed by an employee;
- an “employer” includes a person who has or had control or direction of an employee; and,
- “work” is defined as labour or services an employee performs for an employer.
In light of these definitions, depending on the day-to-day duties of the individual and surrounding circumstances, the risk is that the “volunteer” might be deemed to be an employee. Tourism and hospitality employers must take great caution in how they engage volunteers.
The following factors have guided the Employment Standards Tribunal in determining if an individual should be considered a volunteer or an “employee”:
- Whether the individual expected compensation;
- Whether the employer directed the individual to engage in specific tasks;
- Whether the employer directed the individual to come to work or set specific hours of work; and
- Whether the individual was given any form of compensation for work provided.
The Employment Standards Branch previously provided information on volunteers in one of its fact sheets and while this does not have any legal effect, it provides some additional guidance as to how the Employment Standards Tribunal may interpret the ESA. The relevant portion of the fact sheet stated:
“Volunteers are persons who choose to provide services for non-profit organizations or charities for which they do not expect compensation. In a profit-based organization, any person allowed, directly or indirectly, to perform work normally done by employees is considered to be an employee, not a volunteer.”
In order to reduce the likelihood that a volunteer could be deemed to be an employee, the terms of the volunteer arrangement should adhere, to the greatest extent possible, to the following guidelines:
- at the time the individual is engaged to perform the volunteer work, ensure that they are aware of the nature of his/her role as an unpaid volunteer, with no expectation of payment for services rendered;
- provide the individual with options relating to the type or nature of volunteer work he/she performs, rather than directing him or her to perform specific work tasks;
- allow the individual flexibility in the hours during which he/she will provide services, including how many total hours of service will be provided on any given day or week (e.g. they may wish to schedule 8 hours of service over the course of two days);
- permit the individual to leave the work site at any time (though setting a reasonable expectation that the individual will provide some warning of their pending departure is not generally problematic);
- avoid giving a volunteer too much responsibility for tasks that are important to the employer’s operations or work that is too similar to work performed by paid employees (e.g. in one decision, the Tribunal found that leaving an individual in charge of a retail store was a significant indicator that the individual was an employee rather than a volunteer); and
- avoid promising the individual that he/she may obtain employment in the future as a result of the volunteer position.
If the operational requirements of the business are such that these guidelines cannot be followed, it may be preferable to engage the individual as a temporary, part-time employee.
PRACTICUM STUDENTS AND UNPAID INTERNSHIPS
While many employers believe that high school students, foreign exchange students, and college and university students engaged in a practicum or intern program are exempt from the ESA, this is a misconception.
As described below, only a very narrow subsection of students may be engaged to perform services without pay.
Secondary school and foreign exchange students
Section 32 of the Employment Standards Regulation contains very narrow and specific exemptions that apply to students. They are:
- Secondary school students employed by a school board to work specifically at the secondary school where he or she is enrolled; and
- Secondary school students in a work study, work experience or occupational study class, which is supervised by a school board. This may include foreign exchange students who are enrolled in a work experience or work study program through their high school.
These exemptions apply only to secondary school students, and not to those enrolled in colleges or universities.
Practicums vs. Internships
The Employment Standards Branch defines a practicum as, “part of a formal education process for students enrolled in a public or private post-secondary institution that involves the supervised practical application of previously classroom taught theory related to course study” and which includes “‘hands-on’ training that is required by the curriculum, and will result in a certificate or diploma.” Since this is hands-on experience that involves practical application of theory directly related to course study, and is required to obtain a post-secondary degree or diploma, it is not considered to be “work”, as defined under the ESA.
The Branch defines internship as, “on-the-job training offered by an employer to provide a person with practical experience.” Where this definition differs under the Act differs from that for a practicum is that an internship is often offered to individuals who have already completed a diploma or degree program and are in search of work. Therefore, since an internship is not required for a student to obtain a diploma, and is offered to students or graduates in search of work, an intern’s duties fall within the ESA definition of “work”. Simply, if an intern performs duties and responsibilities that would normally be assigned to a paid employee, then ESA considers the intern an employee of the organization and, accordingly, is entitled to all appropriate wages, benefits and entitlements offered to other employees performing similar functions.
Ultimately, employers must be cautious when using volunteers and offering internships, and should determine whether or not such individuals would be considered “employees” under the ESA. Additionally, it is important to note that although similar considerations apply, an individual may be considered a “worker” under the WCA and not an “employee” under the ESA, or vice versa. These determinations are significant to employers and can have a significant impact on their potential obligations and liabilities. Employers are encouraged to seek legal advice prior to making important decisions in this area.
Information provided by Ryan Anderson, an employment lawyer with Mathews Dinsdale & Clark LLP. The information provided in this article is necessarily of a general nature and must not be regarded as legal advice. For more information about Mathews Dinsdale & Clark LLP, please visit mathewsdinsdale.com.
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