What is an Internship Agreement?
Interns are individuals who work or study under the guidance of experienced employees in an organization for a limited period of time. This can include job shadowing, on-the-job training or work experience placements. Internships are usually undertaken by students or recent graduates looking to gain relevant skills and experience to make them more employable. However, for an internship to be successful for both parties, an agreement should be in place to set out the terms on which the internship is provided. This document is usually called an internship agreement.
Internship agreements have a number of purposes for both the employee and the employer. If an intern signs an internship agreement, it is likely that the internship will be treated as work experience rather than as a contract of employment. This is particularly important for employers who want to avoid being liable to an intern as an employee and avoid the obligations which follow from that, such as pension arrangements, hours restrictions and potential claims in the employment tribunal .
However, employers must still pay interns who are employees a minimum salary, and provide them with terms and conditions in line with the rest of the workforce, less any allowances for the fact that the employee is not permitted to do all the work other employees can do due to an age restriction (for example, employees under the age of 18 cannot work in certain environments such as pubs).
If an intern does not sign an internship agreement then there is a risk that the internship may turn into a contract of employment. There is no set precedent for determining whether an internship is a contract of employment, as opposed to work experience, but there are a number of factors which can influence this. These include:
Therefore internship agreements are highly useful, if not essential, in limiting the terms of the internship and setting out what is expected from both the employer and the intern.
Key Components of an Internship Agreement
Internship agreements should ideally be approved in writing and contain the following:
Duration: The agreement should state the intended duration of the internship. This will help to avoid any disputes about when the internship ended. There must be an express indication that the relationship will be terminated on one or other side notice, or without notice after a certain period. A probation period is recommended.
Responsibilities and duties: The agreement should state clearly what the intern’s responsibilities are. It is important to ensure that an intern is not exploited by being required to do menial work or complete tasks that are not related to their work/purpose of the internship and which are designed instead to fill a role normally performed by a permanent employee. The intern must be an active participant in the work. If the intern is required to perform tasks outside the scope of the internship and for purposes other than his or her development, and if such tasks are an integral and substantial component thereof, there is a possibility that the relationship might not be that of a genuine intern. If an intern is required to work overtime and does work such overtime, this could also be indicative of a relationship of employment.
Remuneration and allowances: An intern working for a minimum of 3 weeks is entitled to remuneration. Interns are, however, often required to undertake the internship in addition to a full or part-time job or as part of a learning programme. These interns would be excluded from the definition of ‘intern’ and therefore would not have a cause of action against the employer for any breach of the terms of the internship agreement. The agreement should deal with the issue of allowances, stipulating the type and amount of allowances available.
Confidentiality: The internship agreement should contain a contractually binding confidentiality clause. Interns should be given as much detailed information as possible about what the organisation considers confidential information. This is vital to assist an intern in complying with your confidentiality requirements. The intern should further be instructed not to disclose any confidential information under any circumstances to an outside person or organisation during or after the course of the internship.
Legal Factors in Internship Agreements
It is critical for the internship agreement to correspond to the requirements of applicable legal provisions, as well as the individual situation of the internship. In addition to agreements under civil law, there are specific provisions under labor laws, which must be followed.
- Selection of the correct legal basis There are three commonly used ways in which internships are agreed upon in practice: The statutory interested is therefore focused on provision 11 of the BGB. This provides for the intestacy of the contract until the last day of the internship. This has the advantage that the internship ends automatically without any notice, provided that the internship contract does not contain a provision to the contrary. If a fixed duration is agreed, for example, "for 3 months", this is not sufficient to end the internship automatically. Rather, in this case it is necessary that the contract mentions that the contract expires at the end of the fixed term (so-called "Beendigung durch Zeitablauf"). If, however, the internship contract provides for termination only for a "serious reason", like a breach of duty or serious misconduct, it needs to comply with the requirements of Section 626 BGB. This can only happen if a notice of termination is given "without notice". Standard periods of notice according to Section 622 BGB are not sufficient. In the case of trainees, Section 20a of the Vocational Training Act (BBiG) requires the company to provide training in an adequate manner. The training ends according to Section 22 BBiG by expiry of the training period. In the case of termination, the respective provisions of Section 22 of the BBiG are to be considered.
- Tasks of the Minors If the intern is a minor, Section 231 of the BGB requires the consent of the parents or the legal representative. Minor children may dispose freely of their assets up to the value of 3,000 Euro (Section 110 BGB), and also enter into contracts if the average wages are up to a total of 50 Euro per week or 200 Euro per year. The parents’ consent to the internship contract forms a sufficient and necessary requirement in order to effect an effective agreement. If the agreement is not formally accepted due to lack of signature, the parents are able to approve the contract retrospectively.
- Diplomas, certificates and employment references The internship contract should specify whether the company is obliged on request to provide the intern with a certificate and what kind of certificate is required.
Advantages of an Effectively Written Internship Agreement
The length of the internship, the duties expected of the intern, and the expectations of the employer should be clearly defined. It is typically suggested that an internship agreement include a non-disparagement clause and a confidentiality clause. There should also be a disclaimer that the intern is participating in the internship for educational purposes and not for financial gain. The intern should agree to comply with workplace policies, rules, laws, and regulations. In addition, the intern can sign off on his/her ability to participate in the internship, while further providing information for his/her contact details, special physical/emotional needs, photograph, social media accounts, and/or additional requirements of the company.
Internship agreements are good for both the intern and the employer. A clear and well-drafted internship agreement protects the rights of both the intern and the employer. An internship agreement sets out what is expected of the intern and the employer, and establishes terms of the arrangement, such as minimum wage, employee status, and duration of the internship. An internship agreement can even protect both parties from being held liable for any potential legal action related to the agreement, since a signed contract is considered to be legally binding.
Common Pitfalls
- Vaguely worded clauses. Be careful of using vague language when it comes to identification of the work that the intern will be performing. Be specific so that there is no room for misinterpretation. An intern could try to have the company believe that he/she was performing the duties of a particular employee rather than the duties that were mutually agreed upon.
- Reference to the intern as an "employee." As noted above, the Fair Labor Standards Act (FLSA) has a specific definition of who is an employee and who is not. The bottom line is that the intern cannot do work that is routinely performed by any employee. The free labor provided by the intern should not have to be supplemented by any employee work product . Remember that the purpose of the internship is to provide individual with a hands-on learning experience. Focus on what the intern will be gaining from the experience and not the work that the company is obtaining through the relationship.
- Omitting an expiration date. Be sure to set an end date for the agreement. The internship should be a limited and duration and the parties need to be clear as to when the internship will end. Otherwise, you risk your business having to deal with an intern indefinitely.
- Failing to modify the agreement to meet legal requirements. The law changes constantly and it is the responsibility of the business to make sure that the agreement is still in line with the legal realities that have changed the landscape of internship programs.
Guidelines for Drafting an Internship Agreement
An internship agreement should be drafted with care and tailored to the particular business and nature of the internship. It should be clear, concise, and easily understood by the intern. The agreement should also include:
Key Terms to Consider
Offer letter. If you provide an offer letter to the intern, you may want to incorporate it into the internship agreement in order to avoid a prior written offer that could be construed as an agreement to employ the intern for a certain period of time.
Additions to state law. In addition to all of the key terms mentioned above, certain state laws require that additional terms be included. If your internship program exists in a state that requires these additional items, you should include them in the internship agreement.
Customizing the internship agreement. The terms and conditions of the internship program may need to be tailored for each intern. For example, if the internship is paid, you should specify the pay rate for the intern. If the intern will be expected to work certain late nights, or provided special equipment, those points should be addressed in the agreement.
Templates and Resources for Internship Agreements
There are many templates and standard formats for internship agreements available online. These can be an excellent starting point for employers and interns who wish to negotiate terms that are specific to their circumstances. Online resources can help clarify, identify and develop the essential content of conventional internship agreements. In some cases, they can even be downloaded as customisable forms. The resource library made available by the California Bar Association, which focuses heavily on internship agreements, has some examples of standard terms, such as the Internship Terms and Conditions Form or Trainee Orientation Brochure published by the Los Angeles County Bar Association, and a Health Insurance Exempt Internship Application Form . In particular, the Trainee Orientation Brochure provides an interesting fact sheet for trainees on Pay Rate and Status, Timely Payment, and Workers Compensation, which should usefully be considered by employees and lawyers alike when developing internship agreements for students. Internships 2013, posted by LawHelp.org, includes downloadable internship agreements. Non-profit organisations may wish to try the internship agreement template provided by All About Law. Finally, the Career Center at the University of Minnesota Law School provides a blank download form for an Internship Agreement, including a sample confidentiality provision.