Standards for Work-Integrated Learning Activities Regulations: SOR/2020-145

Canada Gazette, Part II, Volume 154, Number 14

Registration

SOR/2020-145 June 26, 2020

CANADA LABOUR CODE

P.C. 2020-490 June 25, 2020

Her Excellency the Governor General in Council, on the recommendation of the Minister of Labour, pursuant to paragraphs 264(1)(a.1) footnote a, (a.3) footnote b, (a.4)footnote b and (i.1) footnote c and subsection 264(2) footnote d of the Canada Labour Code footnote e, makes the annexed Standards for Work-Integrated Learning Activities Regulations.

Standards for Work-Integrated Learning Activities Regulations

Interpretation

Definition of Act

1 In these Regulations, Act means the Canada Labour Code.

General Provisions

Educational institutions

2 For the purpose of subsection 167(1.2) of the Act, the educational institutions are

Provision of documents to employer

3 Before performing activities referred to in subsection 167(1.2) of the Act, a person must provide the employer with all documents, issued by an educational institution or vocational school referred to in section 2 of these Regulations, that contain the following information:

Record-keeping

4 (1) An employer of a person referred to in subsection 167(1.2) of the Act must keep a record containing the following:

Period for keeping records

(2) An employer must keep the record referred to in subsection (1) for a period of 36 months after the day on which the activities cease.

Application and Adaptations

Part III of the Act

5 Subject to section 7 of these Regulations, the following provisions of Part III of the Act apply to the persons referred to in subsection 167(1.2) of that Act and, in relation to those persons, the employer:

Canada Labour Standards Regulations

6 Subject to section 7 of these Regulations, the following provisions of the Canada Labour Standards Regulations apply to the persons referred to in subsection 167(1.2) of the Act and, in relation to those persons, the employer:

Adaptations

7 (1) For the application of the provisions of Part III of the Act set out in section 5 and subsection 7(2) of these Regulations and the provisions of the Canada Labour Standards Regulations set out in section 6 and subsection 7(3) of these Regulations

Part III of the Act

(2) The following provisions of Part III of the Act are adapted as follows for the purpose of applying them to the persons referred to in subsection 167(1.2) of the Act and, in relation to those persons, the employer:

Canada Labour Standards Regulations

(3) Subsection 34(1) of the Canada Labour Standards Regulations is adapted as follows for the purpose of its application to the persons referred to in subsection 167(1.2) of the Act and, in relation to those persons, the employer:

Coming Into Force

S.C. 2015, c. 36, s. 92

8 These Regulations come into force on the day on which section 92 of the Economic Action Plan 2015 Act, No. 1 comes into force, but if these Regulations are registered after that day, they come into force on the day of their registration.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

In December 2017, legislative amendments to Part III (labour standards) of the Canada Labour Code (the Code) were enacted to limit unpaid internships in the federally regulated private sector to only those that are part of an educational program. These supporting regulations are made to clarify when an internship can be unpaid by establishing the process to be followed and to specify the applicable labour standards protections.

Background

Over the past few decades, there has been an increase of internship arrangements in the job market, and interns are now found in all industries and occupations. Internships are workplace placements that offer opportunities to gain hands-on work experience. They differ from standard employment in that they are temporary in nature and include a learning component, ranging from observation to more formal learning-by-doing work.

In recent years, the Canada Labour Code was amended to clarify the status of interns in the workplace and to ensure that they receive appropriate protections.

In 2015, legislative changes to Part II of the Code extended the occupational health and safety protections applicable to employees to interns. All interns will also benefit from the improved framework for the prevention of harassment and violence, including sexual harassment and violence, when the legislation introduced under Bill C-65 [An Act to amend the Canada Labour Code (harassment and violence), the Parliamentary Employment and Staff Relations Act and the Budget Implementation Act, 2017, No. 1] comes into force.

In December 2017, legislative changes to Part III of the Code were enacted to limit unpaid internships in the federally regulated private sector (the Budget Implementation Act, 2017, No. 2 amended the Economic Action Plan 2015, No. 1). The legislative changes to Part III recognize interns in two ways:

These legislative changes to Part III of the Code require supporting regulations in order to come into force. The Standards for Work-Integrated Learning Activities Regulations (the Regulations) establish the following: (1) the educational institutions at which the student can be fulfilling the requirements of an educational program through an internship, (2) the documentation required to support a student placement that can be unpaid, (3) the labour standards protections for students in work-integrated learning, and (4) related administrative requirements.

Part III of the Code establishes employment conditions such as hours of work, payment of wages, overtime pay, general holidays, protected leaves and rights on termination of employment. Part III applies to the federally regulated private sector, including

The Labour Program is responsible for administering the Code and, through its inspectorate, ensuring compliance and enforcement of Part II and Part III.

Objectives

Description

Process for determining that a student placement can be unpaid

The Regulations prescribe that for a student placement to begin, the student is required to provide the employer with documents issued by the educational institution that contain the following information:

Furthermore, the Regulations establish which educational institutions are covered by the legislative provisions. For post-secondary and vocational educational institutions, the Regulations incorporate by reference the Directory of Educational Institutions in Canada, which provides a list of recognized educational institutions in Canada. The Directory is maintained by the Canadian Information Centre for International Credentials, in close collaboration with competent authorities responsible for education in the provinces and territories.

Labour standards protections for students in work-integrated learning

The Regulations list the labour standards protections under Part III that apply to students and specify how these provisions are to be adapted. The labour standards protections include

The Regulations also include protections against sexual harassment, until the related provisions under Part III are consolidated into a new framework for the prevention of harassment and violence under Part II [under Bill C-65, An Act to amend the Canada Labour Code (harassment and violence), the Parliamentary Employment and Staff Relations Act and the Budget Implementation Act, 2017, No. 1]. This will ensure that there is no gap in coverage for students in work-integrated learning.

Administrative requirements

The Regulations specify record-keeping requirements with respect to students in work-integrated learning. The employer will be required to keep, for at least three years after the placement, the documents issued by the educational institution as well as written records such as hours in the workplace, general holidays granted and days of any leave taken.

Regulatory development

Consultation

A series of consultation sessions were held in September 2018 with representatives from business and labour groups representing federally regulated employers and employees, student and intern associations, educational institutions and associations, and other organizations. The consultations were based on a policy intent paper circulated in August 2018. A total of 17 organizations participated and six written submissions were received. Labour Program officials responsible for the administration and enforcement of Part III of the Code (i.e. technical advisors and inspectors across the country) were also consulted.

The Regulations were developed to balance the stakeholder views heard during consultations. The suggestions that fell outside the scope of the enabling legislation were not incorporated into the Regulations. For instance, some participants stated that an employer should commit to specific learning objectives and student mentoring, and that a maximum duration for the placement should be prescribed in regulations.

Process for determining that a student placement can be unpaid

Participants had mixed reactions regarding the proposed process for determining that a student placement is a formal part of a program and that it can be unpaid. Labour organizations, as well as student and intern associations, proposed that the process should include a tripartite agreement between the educational institution, the employer and the student and that learning objectives should be set out in advance. However, educational institutions and associations warned against creating a process that would be overly prescriptive and could infringe on education jurisdiction. In order for educational institutions to have some control over which unpaid internships are acceptable, they will have the power to simply withhold the required documentation if they do not approve of the internship. Because educational institutions already have to make decisions about whether or not internships satisfy the requirements of their programs and the manner in which they approve of internships is not prescribed under these regulations, the work needed to produce the documents is the only administrative burden placed on educational institutions.

Labour standards protections for students in work-integrated learning

The proposed set of labour standards protections included in the policy intent paper was generally well received.

Participants generally agreed that a firm limit of 40 hours per week should be set. A few participants suggested lowering that limit, while others called for flexibility to surpass the limit in certain circumstances. Participants generally supported that, if a student has an unpaid internship and paid employment with the same employer, that the combined hours of the internship and the work should not exceed 48 hours per week.

Given the expected short duration of student placements, the proposed Regulations included only short-term protected leaves (for bereavement, medical leave, personal leave, leave for victims of family violence, and leave for traditional Aboriginal practices). Labour groups as well as student and intern associations proposed that other protected leaves (such as maternity/parental leave and compassionate care leave) should apply. These leaves are normally taken for a longer duration and it would not be practicable to require the employer to reinstate a student due to a long-term protected leave. Moreover, educational institutions and associations also noted that extended absences from the work-integrated learning placement are managed on a case-by-case basis and that processes are in place to safeguard the interests of students.

Labour groups, as well as student and intern associations, expressed that early termination of a placement can cause hardship for a student in work-integrated learning (e.g. lost credits and tuition). However, it was not deemed feasible to extend employee protections for early termination (e.g. mandatory notice period or pay in lieu of notice) to student interns. Moreover, educational institutions and associations expressed that early terminations are dealt with on a case-by-case basis and that academic programs often use alternative assignments to make up for an incomplete placement.

It should be noted that new labour standards protections, introduced under the Budget Implementation Act, 2018, No. 2 (Bill C-86) in December 2018, were not part of the regulatory consultations held in September 2018. However, prepublication of the draft Regulations in the Canada Gazette, Part I, provided an opportunity for Canadians to provide feedback on the suitability of these new protections for students in work-integrated learning, which include unpaid breaks, a 96-hour schedule notice, 24-hour notice of change or addition of a shift and rest period between shifts.

Administrative requirements

Several participants proposed tailoring record-keeping requirements for students in work-integrated learning. This suggestion was incorporated into the Regulations.

Regarding the process for determining that a student placement can be unpaid, several participants proposed developing a template to facilitate the submission of the required information from the educational institution to the employer. This suggestion will be considered as part of the implementation process and the development of education and program guidance materials.

Additional feedback received

Labour groups, as well as student and intern associations, proposed developing information materials targeted to students and educational institutions, which in addition to labour standards protections could cover human rights and health and safety protections. These suggestions will be considered as part of the operational planning to inform stakeholders about the rights of interns and enforce these rights.

Lastly, in light of gender and equity considerations, labour organizations, as well as student and intern associations, stated that the federal government should exercise leadership and develop programs that offer financial support to facilitate access to paid student placements, in particular for disadvantaged students. In relation to this, the Budget 2019 announced the federal government’s commitment to invest $631.2 million over five years to support up to 20 000 new work-integrated learning placements per year for post-secondary students across Canada.

Response to prepublication of the proposed Regulations

The proposed Regulations were prepublished in the Canada Gazette, Part I, on June 8, 2019. During the subsequent 30-day comment period, submissions were received from three groups: one internship sponsoring organization; one union; and one employer association. The employer association was pleased that the documentation process would be light, but reiterated concerns raised during the 2018 consultations about certain labour standards protections. The other groups suggested policies to protect interns that were outside the scope of this regulatory process, such as to limit the duration of unpaid internships, devote more resources to compliance efforts or launch a communications plan to raise awareness about the new regime. One group offered their support in the development and dissemination of related informational materials.

As a result, feedback received during the prepublication period did not result in revisions to the regulatory text. The only changes made to the prepublished draft regulations were technical adjustments that had a negligible effect on the impact of the regulations.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, a preliminary assessment concluded that the proposal has minimal implications on modern treaty holders.

Instrument choice

The statutory changes to Part III of the Code, which originally received royal assent on June 23, 2015, are intended to provide parameters for the use of unpaid internships, as well as legally enforceable labour standards protections for student interns. As described above, these provisions require the adoption of regulations to become operational.

In several countries, labour standards legislation specifies if its application covers students in work-integrated learning. Across Canada, eight jurisdictions exempt students participating in an approved work placement from some or all labour standards protections. These Regulations take a similar approach to limit the use of unpaid internships, but go one step further by establishing the process that needs to be followed and by tailoring the applicable labour standards protections. This approach is in line with the 2017 Report of the Expert Panel on Youth Employment in Canada, which recommended eliminating unpaid internships except for those that are part of an academic or community program.

Argentina, Brazil, France and Romania have adopted specific legislation to regulate internships, with clear rules regarding the duration, learning objectives and institutional arrangements that need to be in place between the parties involved. This approach establishes a comprehensive set of rules for internships, but it also creates regulatory and compliance burden.

Other countries, such as Japan, South Africa and the United Kingdom, rely on codes and voluntary charters. However, these soft tools are not enforceable by law. Recent research points to the fact that a more robust regulatory environment is needed to ensure the quality of student placements.

Regulatory analysis

According to the Federal Workplace Jurisdiction Survey, in 2015, there were 2 346 unpaid interns in the federally regulated private sector. This survey did not provide information about the number of unpaid students in work-integrated learning. The working hypothesis retained for the purpose of this impact assessment is that half of these unpaid interns are students, which may be an upper-bound estimate since anecdotal evidence about unpaid internships relates mostly to entry-point jobs not associated with formal educational programs.

It is further assumed that the number of unpaid students in work-integrated learning with federally regulated employers will grow at the same pace as the anticipated Canadian labour force expansion for the 10-year period (2020–2029) considered in this analysis. Therefore, it is estimated that employers in the federally regulated private sector will host approximately 1 250 to 1 350 unpaid students in work-integrated learning annually for the next 10 years.

All employers in the federally regulated private sector, around 19 000, could be potentially affected by these Regulations. However, the actual number of such employers hosting unpaid students in work-integrated learning is expected to remain under 200 for the 10-year period considered in this analysis.

Anticipated costs

The Regulations are expected to entail limited compliance and administrative costs for employers in the federally regulated private sector. Small administrative costs will also be incurred by educational institutions. A substantial portion of these costs will be related to the record-keeping requirement for determining that a student placement is a formal part of an educational program. All costs outlined in this impact assessment are rounded to the nearest hundred and expressed as a present value, in 2012 dollars, discounted at 7% over the 10-year period (2020–2029), unless otherwise specified. The total anticipated cost is $471,100 and can be broken down as follows:

Since employers in the federally regulated private sector are already required to keep records about their employees, the record-keeping requirements for students in work-integrated learning will not impose an additional administrative burden, with the exception of the filing of the documents issued by the educational institution.

The government will also incur some costs associated with the development of new guidance materials that will be posted online or disseminated to educational institutions, employers and students in work-integrated learning in order to educate them about the new rights for students undertaking internships and the obligations of employers who take them in.

Anticipated benefits

The Regulations are expected to foster a work environment where employers, students and educational institutions can leverage work-integrated learning opportunities more confidently. The Regulations are therefore anticipated to promote a culture of trust and accountability conducive to stable and productive workplaces. The Regulations will

Cost-benefit statement

Base Year

Other Relevant Years

Final Year (Present Value)

Total

Annualized Average

A. Quantified impacts in $

Benefits

All employers

2020

2029

N/A

N/A

Administrative costs

Educational institutions

2020

2029

N/A

N/A

Large and medium federally regulated businesses

2020

2029

$194,600

$27,700

Small federally regulated businesses

2020

2029

$238,600

$34,000

Subtotal administrative costs

$433,200

$61,700

Compliance costs

Educational institutions

2020

2029

$37,900

$5,400

Large and medium federally regulated businesses

2020

2029

N/A

N/A

Small federally regulated businesses

2020

2029

N/A

N/A

Subtotal compliance costs

$37,900

$5,400

Total costs

$471,100

$67,100

Net benefits

-$471,100

-$67,100

B. Quantified impacts in non-$

Positive impacts

By stakeholder

N/A

N/A

Negative impacts

By stakeholder

N/A

N/A

Note: In 2012 constant dollars, discounted at 7%.

Small business lens

It is expected that small employers in the federally regulated private sector (employers with fewer than 100 employees) will not be disproportionately affected by the regulatory changes and that they do not require special consideration in implementing this regulatory proposal, as the costs anticipated from this regulatory proposal are low and do not appear to unduly burden small businesses.

All employers in the federally regulated private sector will carry limited initial and sustained incremental administrative costs. The total discounted incremental cost for all federally regulated small businesses anticipated from this regulatory proposal is approximately $238,600, averaging $141 per small business.

Small Business Lens Summary

Number of small businesses impacted

250 (average for the period)

Number of years

10 (2020–2029)

Base year for costing

2012
Small Business Lens Summary

Compliance costs

Annualized Value

Present Value

Issuance, verification and filing of the documents on the
work-integrated learning requirements. Not federally regulated.

$1,300

$8,900

TOTAL (Compliance costs)

N/A

N/A
Small Business Lens Summary

Administrative costs

Annualized Value

Present Value

Human resources personnel training on the Regulations and their incidence on students in work-integrated learning

$31,600

$221,700

Work-Integrated Learning Agreement form verification and approval by the student intern’s employer.

$1,500

$10,400

Work-Integrated Learning Agreement form recording and filing.

$900

$6,500

TOTAL (Federally regulated)

$34,000

$238,600

TOTAL COST (All impacted small businesses)

$35,300

$247,500

Cost per impacted small business

$141

$990

Note: In 2012 constant dollars, discounted at 7%.

One-for-one rule

The cost of the administrative burden associated with the Regulations is related to the verification and filing of the documents by employers as per the work-integrated learning requirements. The estimated administrative burden costs were derived based on the following assumptions: the verification of this form will normally take 15 minutes and its filing will be completed in 10 minutes, on average.

The annualized incremental costs of the regulatory burden that is anticipated from this regulatory initiative have been estimated to be $35,300 in 2012 dollars (base year is 2012) or $141 per affected business. The regulatory initiative introduces a stand-alone regulation under Part III of the Canada Labor Code, which has the effect of triggering a new title under the one-for-one rule.

The required administrative activities were discussed with employers and educational institutions at the consultations described above in September 2018. These stakeholders confirmed the Labour Program’s estimates as to how much work would result from the administrative requirements. The impact of the record-keeping requirements was also informed by the fact that they resemble long-established existing requirements for employees under the Canada Labour Standards Regulations.

Because the Standards for Work-Integrated Learning Activities Regulations is a new regulation, it adds a new title to the regulatory stock of the Labour Program.

Regulatory cooperation and alignment

The regulatory proposal is not developed as part of a formal regulatory cooperation forum.

The Regulations are part of domestic and international efforts to promote decent work for young people. In particular, they are aligned with recommendations from recent research commissioned by the International Labour Office regarding the regulation of internships (A. Stewart et al., The Regulation of Internships: A Comparative Study, Employment Working Paper No. 240, 2018).

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

Positive gender-based analysis plus (GBA+) impacts are anticipated since the Regulations will extend labour standards protections to students in work-integrated learning, where women, new immigrants, visible minorities and persons from an economically disadvantaged background are likely overrepresented.

There is some evidence that women tend to be involved more often than men in unpaid internships. According to a large American online survey completed in 2009 by 27 335 undergraduate students at 234 colleges and universities throughout the United States (Intern Bridge, 2009), women were significantly more likely to be engaged in an unpaid internship (77%). The survey also indicates that students from low-income families have a much higher level of participation in unpaid internships than students from high-income families. An exception exists, however, in the fields of finance as well as art and entertainment, where students from high-income families are willing to accept unpaid placements in so-called “coveted careers.”

Recent studies and reports, such as those of Attfield and Couture (2014), DiRienzo (2016) and O’Higgins (2017), suggest that access to student placements replicates many of the social inequalities found in the broader labour market, where women and students from low-income families struggle to access paid and quality placements. Students from high-income families, partly as a result of being well connected, are more likely to find paid internships.

The Regulations will create an accountability framework in which the employer must ensure that a recognized educational institution approves that the activities to be performed by the student satisfy educational requirements. However, recent comparative research commissioned by the International Labour Office suggests that the involvement of an educational institution is not sufficient to guarantee the educational quality of a student placement (A. Stewart et al., 2018). Additionally, educational institutions alone cannot ensure that disadvantaged groups are given a fair share of paid and unpaid work-integrated learning opportunities.

Fostering work-integrated learning placements with a consistently high educational value, where disadvantaged populations are adequately represented, will require continued collaboration, communication and knowledge sharing among governments, employers, student and intern associations, as well as educational institutions and associations.

Implementation, compliance and enforcement, and service standards

The Regulations come into force with the legislative amendments on September 1, 2020, in order to coincide with the beginning of a new academic year and allow all new internships in federally regulated industries to be covered under the new legislative and regulatory provisions from that point forward.

Implementation of the Regulations will require the development of new guidance materials to inform employers, students in work-integrated learning, and educational institutions and associations. The Labour Program is currently preparing policy guidelines for employers as well as various information materials for dissemination to educational institutions, employers and students in work-integrated learning. These materials will be made publicly available prior to the coming into force of the new provisions. Materials will be updated and new materials will be produced as it becomes necessary over the course of implementation.

Currently, compliance with Part III of the Code is achieved using a variety of approaches, including education and counselling, investigation of complaints and inspection of workplaces. In addition, Budget Implementation Act, 2017, No. 1 introduced a number of new provisions in order to modernize compliance and enforcement measures under the Code, some of which are still being implemented. All new compliance and enforcement measures under the Code will apply to the labour standards protections that interns will receive.

Powers of inspectors responsible for the administration of Part III of the Code will allow them to investigate labour standards complaints and engage in inspections to verify compliance with the Regulations. Inspectors will be trained on how to apply and enforce labour standards protections in relation to students in work-integrated learning.

Contact

Danijela Hong
Director
Labour Standards and Wage Earner Protection Program
Workplace Directorate
Labour Program
Employment and Social Development Canada
Email: NA-LABOUR-STANDARDS-NORMES-DU-TRAVAIL-CONSULTATIONS-INTERNS-GD@labour-travail.gc.ca