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Business Law

Dangers of Hiring a Non-Paid Intern

Jun 2nd, 2014

By Seth B. Abbey

As summer approaches and hordes of students are seeking or alternatively, have found jobs, it is important that start-ups and entrepreneurs take the proper measures to protect themselves against the possibility of having to pay unanticipated wages.

It is a common practice for businesses to hire non-paid interns who exchange their work for training, experience and mentorship. This practice, can cause undesired consequences and expose an employer to thousands of dollars of unpaid wages.

The golden rule is simple - all employees in Québec are entitled to the statutory minimum wage, with a limited number of exceptions, which include:

  1. people not covered by the Labour Standards Act such as certain home caregivers, construction workers, students in a government job introduction program and senior management;
  2. a trainee under a specific vocational training program recognized by law;
  3. an employee entirely on commission who works in a commercial undertaking outside the establishment and whose working hours cannot be controlled; and
  4. a student employed in a non-profit organization having social or community purposes;

Therefore, if you use unpaid interns, prepare for the possibility that one may bring a claim for unpaid wages.

For a more detailed analysis, my colleague François Demers blogged about the danger in hiring non-paid interns in February, click here (Article is in French).

 Seth B. Abbey is a business lawyer at Spiegel Sohmer Inc. where he helps new and seasoned businesses alike plan strategically for growth, and resolve the problems that crop up along the way, whether with fundraising, taxation or relations with vendors, customers or employees.

Seth’s practice focuses on private equity/venture capital financing, mergers and acquisitions, corporate finance, media and technology and acting as general counsel for start-ups and entrepreneurs.

Seth is available to answer your questions about this and other topics.