Can I hire an unpaid intern in Ontario?

Startups are tempted by unpaid interns: eager students, tight budgets, real work to do. In Ontario, the law starts from the assumption that someone doing work for your business is an employee.

When is an intern an employee?

Under s. 1(1) of the ESA, “employee” includes someone who receives training from an employer in a skill the employer’s employees use. Since March 21, 2024, that expressly includes work performed during a trial period (s. 1(2.1)), so an unpaid “trial shift” or test project for a job candidate can count. Ontario’s employee status guide says calling someone an intern or trainee doesn’t decide their status. If they’re an employee, they’re entitled to minimum wage, vacation pay, public holidays, overtime and the other ESA standards.

Employers are also prohibited from treating an employee as if they weren’t an employee under the ESA (s. 5.1).

What are the exceptions?

Situation	ESA applies?
Student working under a program approved by a college of applied arts and technology or a university, or a qualifying program approved by a career college registered under the Ontario Career Colleges Act, 2005	No
Secondary school student in a school board work experience program	No
Trainee who meets all the trainee conditions below	No
Graduate in an informal “internship” doing real work	Yes
Student doing an internship that isn’t part of an approved program	Yes, unless the trainee conditions are met

What are the trainee conditions?

The current ESA doesn’t list these conditions. They come from the former Employment Standards Act, and the ministry has long used them to decide whether a trainee falls outside the Act. All of them need to be met:

1. The training is similar to that given in a vocational school.
2. The training is for the benefit of the individual.
3. The person providing the training derives little, if any, benefit from the activity of the individual while being trained.
4. The individual does not displace employees.
5. The individual isn’t given a right to become an employee.
6. The individual is advised that they’ll receive no remuneration for the time spent in training.

The test doesn’t require that advice to be in writing, but putting it in writing is sensible. Condition 3 is where most startup internships fail: if the intern is shipping code, running social media or doing sales outreach, the business benefits.

What about co-op students from approved programs?

They’re excluded from the ESA while working under the approved program, but other obligations remain: health and safety law, human rights law, and workplace insurance arrangements. See Ontario’s page on workplace insurance for students on unpaid placements. Many startups pay co-op students anyway.

What else should an internship agreement cover?

Whether paid or not: confidentiality, an assignment of IP the intern creates, and a moral rights waiver. Students aren’t automatically employees for IP purposes, so without a written assignment they may own their work. See does my company own what its employees create.

What are the risks of getting it wrong?

Claims for unpaid wages and other ESA entitlements, ESA inspections and orders, and IP ownership gaps that show up in due diligence.

What to do next

We prepare employment agreements and contractor agreements with IP terms, at fixed fees on our fees page. See also employee or contractor.

This guide is general information about Ontario law, not legal advice for your situation. To set up an internship properly, book a free 15-minute consult.