Student or Staff? Why Misclassification in Higher Ed Still Trips Institutions Up

Universities and colleges in Canada often rely on students for a wide range of roles, from research and teaching to administrative support. But when does a student cross the line from learner to employee?

Misclassification can lead to significant liability, including back pay, penalties, and reputational risk. But figuring out when a student becomes an employee can be deceptively complex, as some interesting arbitration cases demonstrate.

The Foundation: Employment Standards

But first let’s lay the foundation. Under the Employment Standards Act (ESA), people who perform work for wages are employees unless they fall under a specific exemption.

 There’s an exemption in which the ESA doesn’t apply to students who are working under a “program approved by” a college or university. This allows either the institution or a private company to offer students co-op and internship opportunities without having to comply with all the requirements of the ESA, so long as this is done through a formal co-op or internship program run by the university. That said, if the student is paid, they will presumably still be an employee for income tax purposes.

Outside of such programs, the key question is whether the student is performing work that primarily benefits the institution rather than fulfilling an educational requirement. If the work is for the institution’s benefit, the student is likely an employee.

Who Benefits from the Work?

It’s obvious that students are employees when performing non-academic work. For example, students hired in campus jobs such as library assistants, event staff, or working at a campus retail or food establishment are employees like any other staff member. Because the work is non-academic and it’s not part of an institutional co-op or internship program, it isn’t part of the student’s education and must be to benefit the institution.

Similarly, though the work of graduate teaching assistants (TAs) is academic in nature, they’re clearly acting as employees benefitting the institution through teaching, mentoring and grading undergraduates. This work isn’t part of the TA’s own educational attainment.

But paid research work is more complicated. Where’s the line between research that’s part of the student’s academic program – which isn’t employment even if the student is “paid” through stipends or financial aid – and research that benefits the institution?

Memorial University of Newfoundland: Students Doing the Institution’s Work

The case law has grappled with this question, but it still comes down to who truly benefits from the work. For example, an arbitration decision from Memorial University of Newfoundland (MUN) found “graduate assistants” to be employees, not just students, largely because they did work that otherwise would have been done by paid university employees. While the specific work differed from student to student, they all “perform work that is in essence the work of the University in both teaching and research.” If the students weren’t there to do the work, the university would have to hire professors or sessional lecturers instead. In light of this, the arbitrator found the university gained a “direct and immediate benefit” from the students’ work.

York University: Faculty Grant Funds Foot the Bill

By contrast, in a more recent decision at York University, certain paid graduate research students were found not to be the university’s employees. The reason was that these students were hired directly by faculty members using the professors’ own money. Faculty members decided who to hire, set their hours of work, supervised them, and paid them out of the faculty member’s grant funding (although the payments got funneled to the students through university payroll). The students were still working as employees. Their research work was to support the professor, not to meet their own academic requirements. But their employer was the professor, not the university – a point driven home by the fact that some professors kept hiring and paying the same individuals as research assistants even after they were no longer York University students.

Takeaways for Academic Institutions

Whether a student is an employee, and who their employer is, is a nuanced determination, but it often turns on the same basic question: who is really benefitting from the work? Is it the student meeting their academic requirements, the professor receiving the research support, or the college or university achieving its core functions?

Given this uncertainty, here are some tips to help protect your institution:

• Document the Relationship: Clearly outline whether the role is academic or employment-based.
• Apply Statutory Exemptions: Review provincial exemptions from employment standards laws, such as Ontario’s exemption for students working under a university or college run program, and apply them strictly and consistently.
• Consult Collective Agreements: Many graduate assistantships are unionized, so consult the specific terms of your collective agreements to distinguish what roles are and aren’t included in the bargaining unit, and seek legal advice to help interpret any ambiguities.
• Default to Employee: Unless work is expressly part of a student’s academic program requirements or a clear exemption applies, err on the side of treating them as an employee to avoid potential liabilities for back pay, penalties or grievances.