Find Out What Info Your Unpaid Internship Agreement Should Cover

Standardized Legal Documents Find Out What Info Your Unpaid Internship Agreement Should Cover

Should You Sign an Unpaid Internship Agreement?

If you are considering hiring an intern, you need to get familiar with laws, regulations, and the specifics of an unpaid internship agreement.

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Is an Unpaid Internship Legal?

An unpaid internship is legal as long as an intern is the primary beneficiary of the agreed arrangement. If an employer primarily benefits from this arrangement, an intern:

  1. Is considered an employee under the Fair Labor Standards Act (FLSA)
  2. Needs to be paid for his or her labor, i.e., is entitled to minimum wage

If the Department of Labor believes an internship violates the FLSA:

  • An employer may be punished
  • An intern can face punishment, especially in the case of international students who might even be deported

You can use the Primary Beneficiary Test to determine who the primary beneficiary is.

Some U.S. states have certain requirements of unpaid internships, for instance, affiliation with academic or educational organizations.

An Unpaid Internship and State Legislation

Aside from the Primary Beneficiary Test, companies need to check their state legislation before opting for unpaid interns.

For example, the state of California has one of the strictest positions in terms of unpaid internships. Here are some requirements:

  1. A vocational program or an accredited school needs to implement and supervise all internship programs
  2. Employers cannot hire an intern until they submit an internship proposal to the Division of Labor Standards Enforcement

If these above-listed criteria are not met, an intern needs to get minimum wage.

Why Should You Prepare an Unpaid Internship Agreement?

This type of agreement is important as it determines the responsibilities and roles during the internship. While lots of businesses practice unpaid internships to provide training within these organizations, interns:

  1. Cannot replace employees
  2. Need to work for their own and not the company’s benefit

The following tips—together with the agreement—can be a good way to prevent potential disputes:

  • Keep a log of hours and overtime
  • Offer college credit (if possible)
  • Do not assign scut work
  • Provide general and transferable training tasks that directly relate to the intern’s field of study

What To Include in an Unpaid Internship Agreement

The following table outlines what an unpaid internship agreement should contain:

Parts Description
Name and details of the company Includes the following company’s details:

  • Name
  • Address

You can also state the purpose of the agreement in this section

Name and details of the intern Lists:

  • Intern’s full name and address
  • Position within the organization
  • The person who will be in charge of the intern
Intern’s duties Addresses the intern’s duties within the company, i.e.:

  • Learning new skills
  • Improving his or her capabilities
  • Increasing his or her knowledge
Nature of internship Includes the details of the work timings, such as:

  • Start and end date of the internship
  • Daily working hours

This is a good place to mention the participation of the educational institution during the internship period

Additional acknowledgments Mentions some of the following:

  • State law
  • Disclose clauses
  • At-will agreement
  • Confidentiality information
  • Representation of the intern
Termination clause Covers the events that can lead to the termination of the internship
Signatures Includes full names and signatures of the:

  1. Intern
  2. CEO of the company

To create an unpaid internship agreement, you can use the legal assistance of an expert or consult some contract templates available online. While the former might cost a small fortune, the latter can be too generic and not suitable for your type of organization or the training you will provide to the intern.

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