Paid & Unpaid Internship Agreement Template (Word, PDF)

An internship agreement is a fixed-term contract between a host organization and an individual who joins primarily to learn, observe, and develop skills in a real work setting. It is not the same thing as an employment contract, even when the intern is paid. An employment contract assumes an ongoing economic exchange of labor for wages; an internship agreement frames the relationship around training and education, with compensation treated as a separate, deliberate choice rather than an automatic entitlement. That framing matters because it shapes how courts and the Department of Labor later characterize the role.

People also confuse an internship agreement with an independent contractor agreement. A contractor runs their own business and delivers a defined result; an intern is supervised, follows the host's schedule, and is there mainly to gain experience. Calling someone an "intern contractor" to dodge both wage law and payroll taxes is the kind of shortcut that collapses under scrutiny. The cleanest programs pick one lane and document it. If you want to compare the contractor route for genuinely independent talent, our independent contractor and freelancer agreement options sit in the business catalog. Choose the wrong document type and the label on the page will not save you, because US agencies look at the actual economic reality of the relationship, not the title you typed at the top.

The governing statute is the Fair Labor Standards Act (FLSA), which requires for-profit employers to pay at least the federal minimum wage and overtime to anyone who counts as an employee. The central question for any unpaid program is therefore narrow: is this intern actually an employee in disguise? Since 2018, the Department of Labor answers that with the primary beneficiary test, a flexible seven-factor framework that asks whether the intern or the employer is the main beneficiary of the arrangement. No single factor decides the outcome, and the analysis turns on the unique facts of each case rather than a rigid checklist.

The seven factors examine the shared understanding that there is no promise of pay, the degree to which the training resembles what a school would provide, whether the internship is tied to a formal education program or earns academic credit, whether it aligns with the academic calendar, whether its duration is limited to the learning period, whether the intern's work complements rather than displaces paid staff, and whether both sides understand there is no guaranteed job at the end. This standard replaced an older and stricter six-part test after the Second, Sixth, Ninth, and Eleventh Circuits rejected it; the DOL formally adopted the courts' approach in Fact Sheet #71. You can read the agency's own seven-factor breakdown in the Department of Labor Fact Sheet #71 on internship programs under the FLSA.

Two structural points sit outside that test. Nonprofits and public agencies have more room for genuine volunteers, but the volunteer exemption is narrow and does not cover work that benefits a for-profit parent. And state wage law operates on top of the FLSA, sometimes raising the floor well above it. Our employment contracts and offer letter templates cover the paid-employee side when an internship is really a job.

The most common trigger is launching a summer or semester internship program at a startup or growing company, where founders want eager talent but have not thought through whether the FLSA requires pay. A written agreement forces that decision early, before the intern has worked three weeks and a wage claim is already taking shape. The second frequent scenario is a for-profit business taking on a student for academic credit. Credit alone does not make an internship lawfully unpaid, but a role genuinely integrated with a degree program scores well on the primary beneficiary test, and the agreement is where you record that integration.

Nonprofits and charities reach for this document when they want to distinguish a true learning placement from ordinary volunteer help or from a paid junior role. The line is real, and the paperwork keeps it visible. Companies also use an internship agreement when an intern will touch sensitive material, since confidentiality and invention-assignment language belongs in the contract from day one, not in an afterthought email.

Two edge cases legitimize careful drafting. First, the intern who quietly becomes indispensable: once a so-called intern is covering a vacant role, answering customer tickets, or hitting revenue targets, the displacement factor flips against you and the position has effectively become paid employment. Second, the international intern on a J-1, F-1 CPT, or OPT status, where immigration rules layer on top of wage law and the agreement has to satisfy both. Treat the agreement as the moment you classify the role, not as a formality you sign after the fact.

• The parties and program identification names the host organization and the intern in full and states plainly whether the internship is paid or unpaid. This single line anchors every other clause, because the entire FLSA analysis flows from the compensation decision recorded here.
• The educational purpose and supervision clause describes the learning objectives, the skills the intern will develop, and the named supervisor responsible for mentoring. This is the heart of the primary beneficiary case: it shows the program was designed around training rather than around getting unpaid labor.
• The term and schedule clause fixes start and end dates and weekly hours, tying the duration to the period of meaningful learning. A definite, limited term reads far better under Fact Sheet #71 than an open-ended arrangement that drifts into ordinary employment.
• The compensation or stipend clause sets out pay, overtime treatment, and any stipend for a paid program, or expressly confirms the absence of pay and the shared understanding behind it for an unpaid one. Getting this language to match reality is what keeps you off the wrong side of a minimum wage claim.
• The confidentiality and invention assignment clause protects trade secrets, customer data, and any work product the intern creates, and it requires the return of company property at the end. For startups whose value sits in code and ideas, this clause is not optional.
• The no-guarantee-of-employment and at-will clause confirms the internship does not promise a job and, if the role is paid, that any resulting employment is at-will. Our at-will employment agreement template handles the conversion when an intern is later hired on.

State law frequently raises the bar above the federal floor, and a handful of jurisdictions deserve particular attention before you run an unpaid program.

California is the strictest environment in the country for unpaid internships. The state generally follows the federal primary beneficiary test, but California's Division of Labor Standards Enforcement applies it skeptically, and the state minimum wage sits well above the federal one, so a misclassified intern in California accrues larger back-wage liability. Programs that displace regular staff or run without genuine academic structure are the ones that draw claims. If your "intern" looks like a junior employee, treat them as one and use our employee offer letter template instead.

New York layers extra obligations on top of the FLSA factors. The state has long applied an expanded set of criteria for unpaid interns, and recent guidance has tightened the expectation that interns receive a genuine evaluation and structured learning rather than routine work. New York's higher minimum wage compounds the cost of getting it wrong, and the state Department of Labor has been active in this area. Document the educational component carefully and keep written proof of the supervision and feedback the intern actually received.

Texas is more permissive and tracks the federal standard closely without adding its own intern-specific overlay, which makes the FLSA primary beneficiary analysis the controlling test. That is not a license to relax: the federal seven factors still apply with full force, and a Texas intern doing displacing work is just as entitled to wages as one anywhere else. Florida likewise follows the federal framework without a separate state intern statute, so the same primary beneficiary analysis governs, and the practical risk again concentrates in roles where the intern's work substitutes for paid headcount rather than supplementing it.

You start by choosing whether the internship is paid or unpaid, because that answer drives the rest of the form. From there you enter the host organization and intern details, then select the state where the internship takes place so the template can flag the local wage rules that apply. Next you describe the program itself: the learning objectives, the supervisor's name, the start and end dates, and the weekly hours, which together build the educational record that the primary beneficiary test rewards.

If you selected a paid program, you fill in the rate and confirm how overtime is handled; if unpaid, you confirm the shared understanding that there is no compensation and no promise of a job. You then set the confidentiality and invention-assignment terms to match how much sensitive material the intern will see. The form lets you add academic-credit details when the placement is tied to a degree program, which strengthens the unpaid classification. Once you have reviewed the summary, you download the finished agreement in Word and PDF and route it for signature. For related hiring paperwork once an intern converts, browse the full US legal documents catalog.

The mistake that produces the most claims is labeling a position "unpaid internship" while assigning it the work of a paid employee. The label carries no weight on its own. If the intern answers customer tickets, closes sales, or covers a vacant seat, the displacement factor turns against the employer and the FLSA treats the role as employment regardless of what the agreement says. A close second is assuming that offering academic credit automatically makes an internship lawfully unpaid. Credit is one factor among seven, and a poorly structured program with credit attached still fails if the company is the real beneficiary.

Employers also stumble on state law by drafting to the federal floor and forgetting that California or New York demand more. Another recurring error is leaving compensation language vague, so the document neither confirms a clear "no pay" understanding nor sets a defensible rate, which is precisely the ambiguity that wage disputes feed on. Finally, many programs skip confidentiality and invention-assignment terms entirely, then discover an intern walked out with code or client data and no contractual obligation to return it. Decide the classification honestly at the start, draft to the stricter of federal and state law, and keep written proof of the training the intern actually received.