CAVEAT – we are not lawyers and the legislation that we will speak to in this article is only meant for educational purposes. Please consult with a lawyer in your provincial jurisdiction to get an actual legal opinion on what we will be speaking to in this article.
We received the following message from Jennifer L, a parent who follows us on our Facebook Page, who also gave us permission to post a screenshot of her question in this article (we blurred out the name of the company):
In today’s onlife world, many teens are looking for ways to earn some extra money through what’s popularly known as a “side hustle.” One rising trend, or side hustle, is becoming a “brand ambassador”, an arrangement where brands incentivize teens to promote their products on social media platforms like TikTok and Instagram. While this might sound like an easy and appealing opportunity, it’s essential for parents and caregivers to understand the potential risks, responsibilities, and legal implications of this modern marketing trend.
Brands that target younger audiences know how to capture their attention. They often use advertising on platforms frequented by teens, promising easy earnings. The typical offer works like this:
- A teen promotes a product on their social media account.
- The brand provides a unique promotional code for the teen to share with their followers.
- For every purchase made using that code, the teen earns a percentage of the sale — often around 15% or receives free products from the company.
While this arrangement can be lucrative for some, it often comes with strings attached that many teens and their parents may not fully understand.
Depending on the province you live in, labour laws may require a parent or guardian’s permission for teens under the age of 19 to sign contracts. However, many brand ambassador programs operate in a legal grey area and may bypass these protections entirely. This can leave teens vulnerable to unfair agreements or exploitative practices.
As an example, here in British Columbia, the rules surrounding a teenager’s ability to sign a contract without parental consent align with the Infants Act (Part 3), (1) which governs contracts involving minors (referred to as “infants” under the law). Here’s how it may apply to a teen wanting to sign a contract to become a brand ambassador:
1. Age of Majority:
- In B.C., the age of majority is 19 years old.
- Anyone under 19 is considered a minor and subject to the rules of the Infants Act.
2. Validity of Contracts Signed by Minors:
Under the Infants Act, contracts signed by minors are not automatically binding. A contract is only enforceable against a minor if:
- The contract is deemed for the minor’s benefit; and
- The terms are fair and reasonable when assessed at the time the contract is made.
3. Contracts for Beneficial Employment:
If the contract involves a form of employment (e.g., being a brand ambassador), it may be considered beneficial if:
- The terms provide fair compensation.
- The work does not exploit the minor or involve unreasonable obligations.
- It complies with B.C.’s Employment Standards Act (2), which sets rules for the employment of minors, such as hours of work and working conditions.
4. Parental or Guardian Consent:
- While the BC Infants Act does not explicitly require parental consent for a minor to enter into a contract, companies often require it as a precaution to ensure the contract is enforceable.
- Parental consent also demonstrates that the agreement has been reviewed and supported by the minor’s legal guardian, which may influence a court’s decision on whether the contract is beneficial and fair.
5. Entertainment Industry Contracts:
If the brand ambassadorship involves work in the entertainment industry (e.g., modelling, social media promotions, appearances), B.C. has specific protections under the Employment Standards Act:
- Minors under 15 require a special permit from the Employment Standards Branch to work.
- For minors aged 15 to 18, employment must not interfere with school attendance or pose a risk to their health and safety.
6. Voidable Contracts:
- A minor in B.C. can void a contract if it is later determined not to be beneficial or if the terms were unfair or unreasonable.
- The company cannot enforce the contract unless it meets the requirements under the BC Infants Act.
What is also important for teens, parents, and caregivers to know is that the Canadian Revenue Agency (CRA) considers income, or gifts in-kind, from brand ambassadorships as taxable. This means:
- Even if the earnings are received as gifts or incentives, they must be reported as taxable income.
- Teens earning more than $30,000 in a calendar year may also be required to register for a GST/HST number and remit taxes.
- The CRA has a tip line where anyone can anonymously report unreported earnings, and they can add interest to unpaid taxes owed.
Parents and caregivers should educate their teens about the importance of keeping records of all income or gifts earned and consider consulting a tax professional if their child’s earnings from ambassadorships become significant.
Unfortunately, not all brand ambassador offers are legitimate. Scammers prey on teen’s desire to earn quick money, often requiring upfront fees, purchases, or sensitive personal information like bank account details. Common concerns to be aware of include:
- Requests for an upfront payment to join the program.
- Unsolicited offers that arrive via direct message.
- Demands for sensitive information like Social Insurance Numbers or banking credentials.
- A requirement for the teen to purchase and wearing their product
- Encourages a teen not to involve a parent or caregiver to become a brand ambassador
Encourage your teen to verify the legitimacy of any opportunity, research the brand thoroughly, and involve you as the parent or caregiver in the decision-making process.
Before your teen commits to any brand ambassador program, consider these protective strategies together first:
- Research the company and check for reviews or scam warnings online.
- Understand the workload, commitments, and any financial or time investment involved.
- Review any contracts with a trusted legal advisor if needed.
- Ensure your teen understands their responsibilities for reporting income and paying taxes.
- Is the company protecting my teen’s privacy? Be wary of programs that ask for unnecessary personal information.
While the allure of becoming a brand ambassador can be exciting for teens, it’s crucial for parents and caregivers to approach these opportunities with a balanced perspective. On one hand, they can offer valuable lessons in entrepreneurship, responsibility, and financial literacy. On the other hand, they may expose teens to legal, financial, and even emotional risks that they may not fully grasp.
Parents and caregivers should take an active role in helping their teens assess the legitimacy and fairness of such offers. By understanding the legal requirements, ensuring transparency, and teaching teens about the importance of contracts, privacy, and tax responsibilities, families can make informed decisions together. Empowering teens with knowledge and fostering open communication will not only protect them but also help them navigate the complexities of the “onlife” world responsibly and confidently.
By staying informed and involved, you can help your teen navigate this new world of digital entrepreneurship safely and responsibly.
Thank you to Jennifer L for this important questions that we know will resonate with many other parents and caregivers who follow us!
Related article we wrote about a brand ambassadorship that went wrong:
Digital Food For Thought
The White Hatter
Facts Not Fear, Facts Not Emotions, Enlighten Not Frighten, Know Tech Not No Tech
References:
1/ https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/96223_01
