03/07/2013 08:12 EST | Updated 05/07/2013 05:12 EDT

The Case For Paid Interns

happy fashion designer standing ...

Unpaid internships are in the news again as a result of a groundbreaking study on precarious employment in Ontario. Findings show approximately 50 per cent of GTA and Hamilton workers have unstable or precarious employment. This does not bode well for younger Ontarians, whose generation faces a far higher unemployment rate than the province-wide average.

There are a number of factors that play into the decision to pay an intern (or not), of course. That said, greed is ultimately the common denominator that business leaders share when determining whether to create paid or unpaid internships. Some value money over talent, and for others, the opposite is true.

When my firm brings on an intern, as we do from time to time, it is important to me that we give that individual the opportunity to demonstrate existing skills, while being exposed to new ideas and opportunities to learn and grow. A good internship should benefit both the intern and the employer.

Often what becomes clear is that there remains a significant gap between what is taught in school and what is expected in the workplace, from both a quality and professionalism standpoint. Suddenly 70, 80 or even 90 per cent accuracy does not cut it. Handing assignments in late or with typos is no longer acceptable and what is considered 'good writing' has changed too. This is why internships are a crucial part of transitioning from school to professional employment, as it is expected during an internship that core skills will be developed that are particularly relevant to the workplace.

Interns at my firm are always paid and have the opportunity to gain industry-specific knowledge, while being able to work on real-world projects. As a business owner, the decision has always been fairly simple and based in part on what is in it for me as a provider of internships, which is the opportunity to attract and grow talent internally.

Unpaid interns might save an employer a couple thousand dollars a month, but the Ministry of Labour guidelines make the internship relatively pointless for anyone who is looking to hire new talent and grow people within their organization.

The only thing that makes an unpaid internship legal is that the intern is not considered an employee and is therefore not covered by the protections of the Employment Standards Act, which includes a requirement that employees are paid the minimum wage.

According to the Ontario Ministry of Labour, there are six criteria that must be met to allow for an unpaid intern to be exempt from the Employment Standards Act and therefore not protected with basic employment rights such as the Minimum wage.

One of the six criteria that allow an unpaid intern to not be classified as an employee is that "the individual [intern] is not accorded a right to become an employee of the person providing the training." This means you can't train an intern and then hire them, without the intern having been considered an employee and therefore entitled to at least minimum wage during the internship itself. Another is that "The person providing the training [the employer] derives little, if any, benefit from the activity of the individual while he or she is being trained [the intern]." In other words if you don't pay an intern there is virtually nothing gained, at least legally, for the business.

What incentive is there to train individuals without benefit during the training or following the training?

In my view, it makes little sense to train someone to work in your industry on an unpaid basis, knowing your business cannot benefit from the time and expense involved in providing that training.

The simple answer is to pay your interns.

It makes sense for employers with a long view towards growth and success to pay their interns. Paid interns can bring their skills and ideas to the table, gain practical experience, grow within an organization and take on additional roles and responsibilities throughout their career.

As someone in business you can either try to hoard money or talent. Hoarding money will cost you talent, just as hoarding talent will cost you money. But the decision to seek out and develop talent internally will pay far greater dividends than the exploitive savings that come from not paying entry level members of your team.