Question 1

What is an internship agreement?

Accepted Answer

An internship agreement is a written contract between a host organization and a student or recent graduate who will perform work and gain practical experience at the organization for a defined period of time. The agreement sets out the internship dates, learning objectives, supervision structure, hours, compensation (paid or unpaid), confidentiality obligations, intellectual property ownership, and any academic-credit arrangement with the intern's school. A well-drafted internship agreement protects both the host and the intern by documenting expectations, clarifying legal status, and minimizing the risk of a misclassified-employee wage-and-hour claim.

Question 2

Can an internship be unpaid in the United States?

Accepted Answer

Yes, but only if the internship satisfies the U.S. Department of Labor's 'primary beneficiary test' for unpaid internships at for-profit employers. If the intern is the primary beneficiary of the arrangement — meaning the educational value to the intern outweighs the economic benefit to the employer — the intern is not considered an employee under the Fair Labor Standards Act, and the employer is not required to pay minimum wage or overtime. If the employer is the primary beneficiary, the intern must be paid as an employee. Nonprofit and public-sector internships have more flexibility, and volunteer service at nonprofits is permitted under separate rules.

Question 3

What is the FLSA primary beneficiary test?

Accepted Answer

The primary beneficiary test, adopted by the DOL in 2018 following several federal court of appeals decisions, replaced the older six-factor test and takes a more flexible approach. It identifies seven non-exhaustive factors a court will weigh: (1) the extent to which the intern and employer clearly understand there is no expectation of compensation; (2) the extent to which the internship provides training similar to that in an educational environment; (3) the extent to which the internship is tied to a formal education program by coursework or academic credit; (4) the extent to which the internship accommodates academic commitments; (5) the extent to which the duration is limited to beneficial learning; (6) the extent to which the intern's work complements, rather than displaces, paid employees; and (7) the extent to which there is no entitlement to a paid job at the end. No single factor is decisive — the test looks at the economic reality of the relationship.

Question 4

Does the primary beneficiary test apply to nonprofit internships?

Accepted Answer

The DOL has historically taken a more permissive view of unpaid internships at nonprofit, charitable, religious, and public-sector organizations. Volunteers who donate their services to nonprofits for public service, religious, or humanitarian objectives — without expectation of compensation — are generally not employees under the FLSA. However, if a nonprofit intern is performing work that would otherwise be done by a paid employee, the analysis becomes more complicated. The safest approach is to either pay the intern at least minimum wage or carefully structure the program to satisfy the primary beneficiary test. State wage-and-hour laws may also apply independent of the FLSA.

Question 5

Must a paid intern receive minimum wage and overtime?

Accepted Answer

Yes. A paid intern who does not satisfy the unpaid-intern test is an employee under the FLSA and is entitled to at least the federal minimum wage of $7.25 per hour (or higher state or local rate) for all hours worked, plus overtime pay at one-and-a-half times the regular rate for any hours over 40 in a workweek. State daily-overtime rules also apply. Many employers simplify compliance by paying all interns an hourly wage at or above the state minimum — avoiding the primary beneficiary analysis entirely.

Question 6

Are academic-credit internships automatically legal as unpaid?

Accepted Answer

No. Academic credit alone does not make an internship legally unpaid under the FLSA. The primary beneficiary test considers academic credit as one factor among seven, and credit is given more weight when it is part of a formal program with structured learning objectives and faculty oversight. But an employer cannot simply add academic credit to a work arrangement and declare it an unpaid internship. The internship must still provide educational value that outweighs the work performed, and it must not displace paid employees. Consult with the intern's academic program to ensure the credit arrangement is genuine and documented.

Question 7

Who owns the intellectual property created during an internship?

Accepted Answer

It depends on what the internship agreement says. By default under U.S. law, an employee's work product belongs to the employer under the 'work for hire' doctrine — but this doctrine only applies to employees, and an unpaid intern who is not an employee under the FLSA may retain ownership of their work unless the agreement assigns IP to the host. Most well-drafted internship agreements include an express IP assignment clause that transfers ownership of inventions, creative work, and work product to the host organization. State-specific carve-outs apply — for example, California Labor Code § 2870 exempts inventions made on the intern's own time without host resources. For academic-credit internships, the school's IP policy may also apply.

Question 8

Are interns covered by workers' compensation?

Accepted Answer

It depends on state law and whether the intern is classified as an employee. Paid interns are generally covered by workers' compensation in the same way as other employees. Unpaid interns are often not automatically covered, but some states (California, New York, Pennsylvania, and others) have extended coverage to unpaid interns by statute, either automatically or at the host's option. Many host organizations purchase voluntary coverage for unpaid interns to protect against injury claims. The internship agreement should specify whether workers' compensation coverage applies and, if not, recommend that the intern's academic program or personal insurance provide coverage.

Question 9

Are interns protected by anti-discrimination and anti-harassment laws?

Accepted Answer

Paid interns who are employees under the FLSA are fully covered by federal anti-discrimination laws — Title VII, ADA, ADEA, GINA — and applicable state and local laws. Unpaid interns have historically had weaker protections, but many states (New York, Oregon, Illinois, California, Connecticut, D.C., Maryland, and others) have extended anti-discrimination and anti-harassment protections to unpaid interns by statute. The host organization should treat all interns — paid or unpaid — as covered by anti-discrimination and anti-harassment policies, provide the same complaint mechanisms, and ensure all supervisors receive appropriate training.

Question 10

Can a host organization offer a stipend instead of hourly wages?

Accepted Answer

Only if the internship legitimately qualifies as unpaid under the primary beneficiary test. If the internship does not qualify, the intern must be paid hourly and must receive at least minimum wage and overtime — a flat stipend that works out to less than minimum wage is a violation. Nonprofit stipends, travel reimbursements, and modest honoraria are common and generally acceptable for unpaid interns, but employers should be careful not to treat a stipend as a wage for someone who is actually functioning as an employee. Document the educational nature of the program and the stipend's role as a cost-of-living support rather than compensation for hours worked.

Question 11

What should an internship agreement include?

Accepted Answer

A comprehensive internship agreement should include: the names of the host organization and intern; the start and end dates; weekly hours and schedule; the learning objectives and skills to be developed; the supervisor's name and role; compensation (if paid) and any stipend or reimbursement (if unpaid); an express statement of employee vs. non-employee status under the FLSA; intellectual-property assignment; confidentiality obligations; anti-harassment and anti-discrimination policy acknowledgment; termination provisions; an academic-credit arrangement if applicable; and signatures. For academic-credit internships, the intern's school should sign or countersign to confirm the credit arrangement.

Question 12

How long can an internship last?

Accepted Answer

There is no legal maximum duration, but internships are most commonly 10 to 14 weeks (a summer program) or one academic term (12 to 16 weeks). Longer internships are acceptable but start to raise primary-beneficiary-test concerns for unpaid programs because duration is one of the seven factors — an indefinite or open-ended 'internship' is hard to justify as primarily educational. For paid internships, duration is a business decision; for unpaid internships, keeping the program limited to a defined semester or summer aligns with the educational purpose.

Question 13

Should interns sign confidentiality and non-disclosure agreements?

Accepted Answer

Yes, especially at technology companies, financial firms, and professional-services organizations where interns have access to proprietary information, customer data, or pre-release products. A confidentiality clause or separate NDA should be included in every internship agreement. Keep the language reasonable and appropriate to the intern's role — a high school or undergraduate intern should not be asked to sign the same confidentiality agreement as a senior employee with access to trade secrets. The agreement should also acknowledge federal and state whistleblower protections and the Defend Trade Secrets Act immunity notice.

Question 14

Can interns be terminated early?

Accepted Answer

Yes. Most internships are offered on an at-will basis, meaning either the host or the intern may end the arrangement at any time. The internship agreement should include an express at-will clause and explain that early termination does not create any continuing obligation on either side. For academic-credit internships, early termination may have implications for the intern's academic standing — the host should notify the school promptly if an intern is terminated for cause so the academic program can respond appropriately.

Factor	Paid	Unpaid (Primary Beneficiary)
FLSA Status	Employee	Non-employee
Minimum Wage	Required	Not required
Overtime	Required over 40/week	Not required
Can Displace Paid Staff?	Yes	No — must complement
Academic Credit	Optional	Strongly encouraged
Risk of Misclassification	Low	Higher; primary beneficiary test applies

Free Internship Agreement Forms

What Is an Internship Agreement?

Learning Focus

FLSA Compliance

IP & Confidentiality

Internship Agreement Form Preview

Internship Agreement

Section 1: Parties & Dates

Section 2: Learning Objectives

Section 3: Compensation

Common Uses

Summer Internships

Academic-Credit Programs

Paid Corporate Internships

Nonprofit & NGO

Startup Internships

Research Internships

Paid vs Unpaid Internships

FLSA Primary Beneficiary Test

How to Create an Internship Agreement

Identify the parties

Set dates and hours

Define learning objectives

Classify paid or unpaid

Assign a supervisor

Address IP and confidentiality

Acknowledge anti-harassment policies

Coordinate academic credit if applicable

Include at-will termination and governing law

Key Components

Parties

Dates and Hours

Learning Objectives

Supervision

Compensation

FLSA Classification

Academic Credit

IP Assignment

Confidentiality

Anti-Harassment Acknowledgment

At-Will Termination

Governing Law

Sample Learning Objectives

Best Practices

Sample Internship Agreement

Frequently Asked Questions

Official Resources

Create your Internship Employment Contract in under 10 minutes.