Unpaid Internship Agreement

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Unpaid Internship Agreement

Brief Introduction of an Unpaid Internship Agreement

Internships form an important part of a student’s learning. They help to bridge the gap between theoretical and practical knowledge. The students learn how to work in a professional setting and how they work in their field is carried out in real-time. They may even lead to a job with the employer. When hiring unpaid interns, it is important to include all the terms of the internship in an agreement. This is called an unpaid internship agreement or learning contract. It states that both the employer and the intern have agreed for the internship to be unpaid. It also lists out the work that the intern has to do, the duration of the internship, and other related terms.

An unpaid internship must qualify as one under the conditions set by the United States Department of Labour (DOL). It must also comply with the Fair Labour Standards Act (FLSA). These laws and regulations aim to prevent employers from using interns as free labor and giving them false promises of a job. Different states may also have their laws. For example, the state of California has adopted the 2010 DOL rules. So a California unpaid internship agreement must comply with all those rules to be valid.

Purpose of an Unpaid Internship Agreement

An unpaid internship agreement (learning contract) helps both the employer and the intern to clarify their expectations. Since it states that the internship will be unpaid, the intern does not harbor unrealistic expectations of getting paid at the end. It allows the employer to define the intern’s role and responsibilities. It also protects the employer from liability by stating that the internship does not guarantee a job at the organization. On the other hand, the intern gets a chance to train on the job and develop skills relevant to his field of work. He gets practical experience and an opportunity to network with industry professionals. All this is achieved with the help of a coherent internship agreement.

Contents of an Unpaid Internship Agreement

This agreement generally includes the following key terms:

  • Names of the employer and the intern
  • The objective of the agreement
  • Duration of the internship
  • Conditions of the agreement
  • Mentor assigned to the intern (if any)
  • Responsibilities of the intern
  • Disclaimers
  • Termination of the agreement
  • Internship rewards (if any)
  • Confidentiality
  • Governing law
  • Signature of the parties

How to Draft an Unpaid Internship Agreement

Before drafting, it is helpful to refer to a sample unpaid internship agreement. This will give you an idea about how the clauses can be framed. Keep in mind the following:

  • Mention the name of the intern and the organization, including its address.
  • Objective: Clearly express that the objective of the internship is to allow the intern to learn about the organization’s business and gain valuable experience. You can draft it accordingly, based on what the parties require. 
  • Duration: Mention the total duration of the internship along with the start and end date.
  • An important point in the agreement is the conditions clause. It must mention all the conditions prescribed by the US Department of Labour. These include statements that the internship is for an educational purpose and the benefit of the intern and that he does not replace regular employees of the organization.
  • Intern’s responsibilities: Under this term, state what duties the intern must fulfill. These relate to the tasks entrusted to the intern as well as general office behavior. For example, the intern must follow his schedule and abide by the rules of the organization. 
  • Disclaimers: This is an important clause that protects employers. It includes disclaimers stating that the internship does not guarantee a job in the organization, the intern will not be considered an employee of the company and that the employer will not be responsible for any injury or loss sustained by the intern during the internship.
  • Rewards: Include this term if the employer will offer many rewards, such as academic credit or a certificate, to the intern. 
  • During the internship, the intern may have access to the employer’s business information. Include a confidentiality clause to prevent him from passing this information to anyone else.
  • State which state’s law will be used to interpret the terms of the agreement.

Negotiation Strategy

The employer and the intern must communicate clearly to understand that the internship will be unpaid. In this scenario, it is the employer that dictates the terms. The inter has very little bargaining power. But he can try and negotiate for better learning opportunities or mentorship during the internship.

Benefits and Drawbacks of an Unpaid Internship Agreement

Benefits to the employer:

  • It does not have to spend on the intern’s salary.
  • It gets assistance from the interns on ongoing projects.
  • The agreement allows employers to screen prospective employees.

Benefits to the intern:

  • He gets to train for the job.
  • It bridges the gap between classroom and workplace.
  • He gets an opportunity to connect with people from the industry.


  • There is no monetary incentive for the intern.
  • The intern usually does not have a say in negotiating the agreement.

What Happens in Case of Violation?

If the intern violates the agreement, the employer can terminate it immediately. If the employer violates any provision of the agreement that is against the federal or state law, the intern can sue the employer in court.

This agreement is an important document for both parties. It informs the interns about the terms of the internship. This ensures that he is aware of his role and the benefits that he will receive. It must also comply with the Fair Labour Standards Act (FLSA)(1), it also protects employers from liability against claims arising out of incorrect expectations. It ensures that the employer complies with all applicable federal and state laws and regulations(2). It is a fairly simple agreement that can be drafted, keeping the above-discussed points in mind.