Unpaid Internship Contract Agreement Template

Published:

Nov 30, 2022

This agreement is appropriate for a short, unpaid internship that is a genuine learning experience.

Rather than for a paid internship where the individual will be an employee of the company. 

Consequently, this contract makes clear that the individual is not a worker or an employee and so is not entitled to statutory employment rights - for example, national minimum wage or paid annual leave / holiday as part of the agreement.

So, if you are wondering how to write an unpaid internship agreement and what this is, then this guide is for you.

Top Features of an Unpaid Internship Agreement

Unpaid internship contract agreements, while often scrutinised, can offer both you and your junior trainee several benefits when structured correctly and used in appropriate contexts. 

Some of these can consist of, for instance:

✅ Unpaid internships provide a structured learning environment where interns can gain practical skills and knowledge relevant to their field of study or interest - enhancing their educational experience.

✅ Interns have the opportunity to meet professionals in their field, expanding their network and opening doors to future job opportunities.

✅ Completing an internship can significantly enhance a resume, demonstrating to potential employers that the candidate has practical experience and a proactive attitude toward their career development.

✅ Interns often receive valuable one-on-one mentorship and feedback from experienced professionals - helping them to grow professionally and personally.

✅ An internship allows individuals to explore and evaluate their interest in a particular career path before committing to it full-time - potentially saving both them and the company time and resources in the long run.

Table of Contents

  • What is an Internship Agreement?

  • What is an Internship Agreement or an Internship Contract?

  • When Should You Use an Internship Agreement?

  • Why is an Internship Agreement Important, and Why Should You Use an Internship Agreement?

  • Unpaid Internship Agreement Contract Template Core Components 

  • What Are Best Practices When It Comes to an Internship Agreement?

  • What are the Common Pitfalls of a Non-Paid Internship Agreement?

  • Understanding the Legal Requirements

  • What is an Unpaid Internship Agreement with Stipend?

  • Unpaid Internship Agreement with University

  • Unpaid Internship Agreement for Academic Education

  • How Does A Standard Non-Paid Internship Agreement Differ for Non-EU / EEA Students vs. EU Students for EU Companies?

  • Unpaid Internship Agreements and Contracts Final Thoughts

  • Final Note About Unpaid Internship Agreements

What is an Internship Agreement?

What does an internship agreement mean? Simply, there is no legal definition of an internship in places such as the UK. 

The Department for Business, Energy and Industrial Strategy (BEIS) in the UK - before it was split into the Department for Energy Security and Net Zero, the Department for Science, Innovation and Technology, and the Department for Business and Trade - for instance, gave guidance that describes an "internship" as follows: 

Internship Definition

"Work experience can be called a 'placement' or an 'internship'. Internships are sometimes understood to be positions requiring a higher level of qualification than other forms of work experience, and are associated with gaining experience for a professional career."

Important to Note

It's important to note that the benefits of unpaid internships depend heavily on the quality of the internship program and its adherence to legal standards and ethical practices - which can vary in different regional jurisdictions around the world. 

Consequently, organisations offering unpaid internships should aim to provide a meaningful experience that genuinely contributes to the intern's education and career prospects.

What is an Internship Agreement or an Internship Contract?

The internship agreement, or contract, is a legal contract between a company and an intern that sets out the parties rights and responsibilities.

Interns can have different employment statuses depending on the nature of their placement, and the internship agreement must be appropriate to the situation and reflect this accordingly.

When Should You Use an Internship Agreement?

This agreement is appropriate for a short, unpaid internship, where the internship is entirely voluntary in nature. 

It is not suitable for a situation in which the individual is an employee or worker of the company or is treated like one.

In this situation, a Paid Internship Agreement Template should be used. 

Why is an Internship Agreement Important, and Why Should You Use an Internship Agreement?

There are a number of reasons why these are very important to implement and why they should be used.

For instance, some of these can be based around:

Removes Uncertainty or Disputes

Having an agreement in place means there is no uncertainty or dispute about what terms have been agreed.

With a written contract in place, it is unlikely that there will be a dispute between the parties about what was agreed upon, either during or after the internship.

For instance, this could be based on the terms and conditions applied to the agreement, particularly where verbal discussions have taken place over some time. 

Consequently, a written agreement that clearly explains the parties’ rights, obligations, and responsibilities reduces confusion, avoids ambiguity or uncertainty, and gives everyone clarity and peace of mind.

The Company is Adequately Protected

It further encourages good relationships between the company and the intern. 

For instance, it puts a new intern at ease and gives them confidence that the company is engaging them. 

This is especially important in early-stage startups, where there may already be some uncertainty and where the structures and processes seen in larger companies may still need to be present.

Unpaid Internship Agreement Contract Template Core Components 

When it comes to a legally vetted template for this, these will tend to include the following core components and sections:

Parties Involved

This section would clearly identify the organisation offering the internship and the intern, including legal names and contact information.

Duration and Schedule

A section would then be needed specifying the start and end dates of the internship, as well as expected work hours. 

This section should also cover any flexibility in scheduling.

Position Description

Outlining the intern’s role, including primary responsibilities and the specific department or team they will join, tends to be another core component.

This section clarifies that the position is unpaid but emphasises the learning opportunities and experiences the intern will gain.

Objectives and Goals

Another component of your template is to define what the intern should achieve by the end of the internship period. 

This could include both project-based goals and learning objectives.

Supervision and Support

Identify the intern's supervisor or mentor within the organisation in the agreement as well. 

Furthermore, it should detail the support structure and how performance feedback will be given to the intern.

Confidentiality Clause

Include a clause that requires the intern to keep company information confidential, protecting sensitive data.

Intellectual Property 

Ideally, a component should clearly state that any work created by the intern during the internship period is the property of the organisation.

Termination Clause

Outline the conditions under which the internship can be terminated by either party, including notice periods.

Insurance and Liability

Specify the arrangements for insurance coverage and clarify the liability aspects of the intern's work with the organisation.

Signature Section

Ensure both parties sign the agreement, validating that the intern and the organisation acknowledge and accept the terms outlined.

What Are Best Practices When It Comes to an Internship Agreement?

For best practice, you should consider areas to include. Such as:

Fairness and Clarity

Ensure the agreement is fair and transparent to both parties. Avoid legal jargon that might confuse the intern.

Flexibility

While the contract should be comprehensive, allow for some flexibility to accommodate for unforeseen changes.

Review and Update

Regularly review and update the agreement as necessary to reflect changes in laws or organisational policies. You can utilise AI contract review for managing contract updates efficiently.

However, please note that as this is a legal contract that is going in place, both parties will need to agree to any changes after it has been signed.

Check Jurisdiction Legality

Have a legal professional clarify the legality of the contract. Some regions' laws in this area may make your contract null and void from the start, in which case you could find yourself legally liable.

What are the Common Pitfalls of a Non-Paid Internship Agreement?

There are a number of common pitfalls for a non-paid internship agreement, such as:

Not Having a Written Internship Agreement in Place 

Whilst there is no legal requirement for an intern to have an internship agreement, having a written internship agreement in place avoids uncertainty and disputes and protects you as an employer.

Using the Wrong Type of Contract

This agreement is appropriate for a short, unpaid internship that is completely voluntary and, therefore, a genuine learning experience. 

If the arrangement is not as such, please see our Paid Internship Agreement Template to be used instead.

Losing the Signed Copy

Without a signed copy of the internship agreement, there is no evidence of the agreed-upon terms and conditions of the internship. 

Consequently, consider using a contract or document storage repository system, like Pocketlaw, where your contracts can be signed via a legally binding eSignature, which can also provide you with a full audit log.

Understanding the Legal Requirements

Before drafting the agreement, it's crucial that you understand the legal framework surrounding unpaid internships in your jurisdiction. 

In many countries, including the UK, the US, Canada, and the EU area, there are specific regulations that determine what constitutes an unpaid internship and the rights of interns.

Please note that these rules are subject to change and may be adapted further after this guide has been written. Consequently, please seek legal advice for a comprehensive list for your jurisdiction. 

However, at the time of writing, for instance:

Unpaid Internships in the UK

In the UK, unpaid internships are generally considered illegal - especially if the intern is expected to work set hours or on set tasks. 

Interns should be paid at least the National Minimum Wage if they qualify as workers. 

However, there are some exceptions, such as students required to do an internship for less than one year as part of a UK-based further or higher education course, who are not entitled to the National Minimum Wage being the main one.

Unpaid Internships in the USA

In the US, unpaid internships are regulated by the Fair Labor Standards Act (FLSA)

For an unpaid internship to be lawful in the US, it must meet several criteria, with some of these including:

  1. The internship should primarily benefit the intern.

  2. It must provide training similar to that given in an educational environment.

  3. The employer should not gain an immediate advantage from the intern’s activities.

  4. Interns cannot displace regular employees and should work under close supervision.

  5. There is no entitlement to a job at the conclusion of the internship.

These requirements are set to ensure that the internship is a learning experience rather than unpaid labour for the organisation.

Unpaid Internships in the European Union

For the European Union, this is taking steps to address the issue of unpaid internships. 

For instance, recently, there have been proposals and movements to crack down on unpaid internships to avoid the exploitation of young workers. 

Unpaid Internships in Canada

In Canada, there are Federal Labour Standards for unpaid internships, which are allowed under certain conditions according to Federal and Provincial labour laws. 

They must, for instance, provide valuable training and experience relevant to the intern’s field of study or career goals and should not replace paid positions or exploit the intern’s labour. 

There are also regulations on work hours and conditions for interns as well that need to be followed.

Consequently, you need to ensure your agreement complies with your local laws to avoid potential legal issues.

What is an Unpaid Internship Agreement with Stipend?

An internship agreement with a Stipend is a formal contract that includes some form of financial compensation for the intern, but it does not have to be a wage.

This Stipend acknowledges the intern's contributions and helps cover expenses such as living expenses, making the unpaid internship more accessible to more people.

What Can Tend To Be Included?

Such agreements detail the Stipend amount, payment schedule, and conditions. 

As a result, these can create a sense of value and motivation among your interns, ensuring a more equitable and inclusive opportunity for participants, especially from more diverse backgrounds. 

Furthermore, stipend agreements often include standard internship elements like duration, responsibilities, and learning objectives, all of which, when combined, further enhance the overall internship experience.

Unpaid Internship Agreement with University

Unpaid internship agreements involving universities can be more common as it is much easier to meet all the legal requirements. 

These agreements, for instance, help to formalise the relationship between the educational institution, the student, and sometimes your host organisation as well. 

Aligns with Education Goals Easily

These agreements ensure that the internship aligns easily with the student's academic goals and program requirements. 

Typically, they include clauses on academic credit allocation, the role of university supervisors, evaluation criteria, and confidentiality provisions as well. 

Tripartite Agreement

This Tripartite agreement ensures that all parties - student, university, and your organisation - have a clear understanding of expectations, responsibilities, and the educational value of the internship. This helps to promote a much smoother integration of practical experience with the intern's academic learning.

Unpaid Internship Agreement for Academic Education

Internship agreements for academic education are designed more to integrate real-world professional experience with academic coursework.

These agreements then outline the educational objectives of the internship, detailing how the experience will contribute to the intern's learning and academic progress. 

Included Provisions

They often include provisions for academic supervision, periodic evaluations, and mechanisms for feedback. 

This type of agreement emphasises the developmental and educational aspects of the unpaid internship, ensuring that the experience is not just work-based but also contributes significantly to the intern's academic and professional growth.

How Does A Standard Non-Paid Internship Agreement Differ for Non-EU / EEA Students vs. EU Students for EU Companies?

Non-paid internship agreements for non-EU / EEA students can often include additional clauses to their contract templates related to Visa and work permit requirements if the Intern is a student coming from outside the EU and taking up this agreement in an EU country - reflecting the legal framework governing internships for international students. 

EU Students

In contrast, when the agreement is inside the EU itself, EU students don't require such provisions due to the freedom of movement and work within the EU. Furthermore, there might be other differences that need factoring in, such as insurance and liability coverage requirements, reflecting the diverse legal and healthcare systems across countries. 

These distinctions, though, ensure that non-EU / EEA students are adequately informed and prepared for their internship experience when they are taking up a position in an EU host country, for example. This, in turn, helps to address legal and logistical issues that are unique to international participants when it comes to companies located inside the EU.

Unpaid Internship Agreements and Contracts Final Thoughts

Creating an unpaid internship contract agreement is a critical step in establishing a transparent and beneficial relationship between the intern who is to be trained and your organisation.

By including the elements outlined above - and adhering to legal requirements - your organisation can provide a meaningful learning experience while protecting both your interests and those of the intern.

Final Note About Unpaid Internship Agreements

Due to the constantly changing laws in this area and the fact that they can vary from country to country, you should consider consulting with a legal professional to ensure that your unpaid internship contract agreement complies with all applicable laws and regulations - especially as these can vary significantly between jurisdictions.

Disclaimer:
Please note: Pocketlaw is not a substitute for an attorney or law firm. So, should you have any legal questions on the content of this page, please get in touch with a qualified legal professional.

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