Working With Interns: Intern Contract Templates vs Employee Contracts
The employment contract
Whether an internship agreement qualifies as an employment contract follows imperatively from the law. A contract is an employment contract if the following three essential elements are fulfilled: (i) the employee’s obligation to perform work, (ii) the employer’s obligation to pay salary and (iii) the presence of a relationship of authority.
The internship agreement
The internship agreement is not specifically regulated by law. The parties are therefore in principle free to agree on the conditions under which the internship agreement will be concluded. Due to the three essential elements of an employment contract, an internship agreement could in fact be an employment contract.
However, there is no “work” within the meaning of an employment contract if the activities are primarily meant to expand the knowledge and skills of the intern, also in the light of the completion of his/her study program. If this is the case, the relationship between the company and the intern will not qualify as an employment contract.
To prevent internship agreements from being regarded as employment contracts as much as possible, the following best practices can be followed:
- Mention in the internship agreement that the agreement was concluded to help the intern to expand his/her knowledge and skills within the company and that the parties explicitly do not intend to conclude an employment contract;
- Use terms like “internship provider” and “intern” rather than “employer” and “employee”;
- Agree that the intern will receive an evaluation in the interim period and at the end of his/her internship, preferably in line with their coursework or curriculum; whether they are in high school or college/university
- Ensure that the intern can expand his/her knowledge and skills and that the educational objectives therefore prevail over the performance of productive work;
- Limit the duration of the internship agreement to a maximum of six months, unless the intern requires a longer internship with regard to his/her study program; and
- Pay a lower internship allowance than the minimum wage (or as comfortable of a wage as you prefer to give)
Feeback around bringing an intern onboard
It’s best to treat interns as potential employees, as you can groom them to fit within your organization, but aren’t explicitly committed to them long term. GIven that, building an actual intern job description puts you in a good standing to set your expectations, document them, and clearly have consistent conversations with candidates. Request or require things like an internship resume, cover letter, references, etc. Check to see if they have prior, preferably, relevant skills or work experience and screen them with either a background check or some light probing via social media to ensure they meet your expectations of who you bring into your company.
If your internship program specifically targets college students, state that in your job posting/description. Get a sense for other student resumes via Google or LinkedIn so your expectations are set from the beginning, as these folks may not be coming with a wealth of experience for you to evaluate on paper. As a hiring manager when working with students, you can also specifically look to see if they have volunteer experience, or participate in extracurricular activities as signs to get higher quality candidates.
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Dear [INTERN NAME],
PRINCIPLE STATEMENT OF TERMS AND
CONDITIONS OF YOUR INTERNSHIP
Welcome to [COMPANY NAME].
This document outlines the Terms and Conditions which apply to your Internship with [COMPANY NAME].
I agree understand that purpose of this agreement is to expand upon my knowledge and experience in the field of [AREA OF BUSINESS]. I also agree and understand that I will be evaluated by my supervisor as to the development and knowledge of the learning and educational experience with to maintain regular contact with [COMPANY NAME].
1. The commencement date of your intern placement is [BEGIN DATE].
2. Your intern placement will be for a fixed period of [LENGTH OF INTERNSHIP], and end on [END DATE]. If all goes well and the business is progressing well, there is the possibility of a permanent role. These opportunities will be discussed with you towards the end of the placement.
3. Your work base will be at the office located at [OFFICE LOCATION], however [COMPANY NAME] reserves the right, with appropriate consultation with you, to change your work base location should the needs of the business require of change of your work location.
4. Your expected working hours will be [hours per week] hours week Monday to Friday. [COMPANY NAME] may require you to vary the pattern of your working hours if required on a temporary or permanent basis should the needs of the post require this (for example, meetings, calls, contact with customers or external bodies).
5. Overtime payments will not be paid. [DELETE IF UNPAID]
6. You will be subject to the terms and conditions as agreed and amended from time to time by [COMPANY NAME] as outlined in any of its policies, procedures, handbooks and other relevant documents.
7. The salary for your role is $[wage per hour] per hour. [OR] This is an unpaid internship and no compensation will be made for duties provided for [COMPANY NAME].
8. If [COMPANY NAME] makes an overpayment to you to which you are not entitled, or is more than that to which you are entitled for whatever reason, you agree to allow [COMPANY NAME] to recover the overpayment by deductions from your salary or other payments due to you. Any deductions will normally be made over the same period that the overpayment was made. It is in your interests to regularly check your pay check details. [DELETE IF UNPAID]
9. You will be paid [frequency of payment] for the hours worked in the previous pay period. A pay period is from [pay period start] to [pay period end]. [DELETE IF UNPAID]
10. You are obliged to give [COMPANY NAME] two weeks’ notice to terminate your internship. [COMPANY NAME] is obliged to give you two weeks notice before terminating your internship.
11. You are required to report any sickness absence as soon as is practicably possible to your immediate supervisor and provide a doctors explanation of sickness where sickness lasts three days or more.
12. During the course of this Internship, it may be necessary for [COMPANY NAME] to share proprietary information, including trade secrets, industry knowledge, and other confidential information, to you in order for you to complete your designated duties. As an intern will not share any of this proprietary information at any time, even after the termination or expiration of this internship. You also will not use any of this proprietary information for your personal benefit at any time, even after the termination or expiration of this internship.
13. You hereby agree that, while you are an intern with [COMPANY NAME] and for one (1) year following the termination or expiration of your internship with [COMPANY NAME], you will not (i) recruit, attempt to recruit or directly or indirectly participate in the recruitment of, any [COMPANY NAME] employee or (ii) directly or indirectly solicit, attempt to solicit, canvass or interfere with any customer or supplier of [COMPANY NAME] in a manner that conflicts with or interferes in the business of [COMPANY NAME] as conducted with such customer or supplier.
14. This document does not serve as an employment contract, but rather specifies the goals, intent and details of the Internship. This agreement constitutes the entire agreement of the parties with respect to the Internship. There is no guarantee or expectation of employment with [COMPANY NAME] at the conclusion of this internship. Any offer of employment will be at the sole discretion of [COMPANY NAME].
If you are in agreement with the above terms and conditions please sign both copies of this statement, retain one and return the other to me.
[AUTHORIZED SIGNATORY OF COMPANY]
I accept this appointment on the terms and conditions stated above, and agree to the following:
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Frequently Asked Questions and Resources
What is a contract?
Contracts are defined as written or spoken agreements which are enforceable by law. They can cover any topic or industry, whether sales, tenancy, employment, or otherwise (source).
What are the different types of contracts?
There are many different types of contracts, as defined by upcounsell, those for fixed prices, employment, lump sums, time and materials, unilateral or bilateral contracts, simple contracts and more. Each has its own specific terms, and can either be oral or written and some are non-negotiable (like adhesion contracts) while others have room to be adjusted or amended.
What makes a contract different from an estimate, quote, bid, or proposal?
Mainly contracts are set and finite and legally binding, whereas estimates, quotes, bids, and proposals are possibilities which can be accepted, rejected, negotiated, or ignored altogether. The key difference is that often a bid or proposal will contain terms and conditions that can be signed by the requestor and turned into a contract (source).
What should I include in my contract?
Every contract is comprised of no less than two core components: clearly outlined terms and signed agreement between two separate parties. For more information, read our 12 clauses you should include in every contract.
How should I write an effective business contract?
Contract creation can be challenging, in most cases getting legal counsel is advised to ensure it will be legally enforceable should you require that. Essentially you need basic terms which should be abided by, and an agreement on what product or service is to be provided, to whom, by whom, and what will be tendered with specific terms (such as deadlines, or how the delivery will be completed). For more tips, read our beginners guide to contract writing.
What is the difference between a contract and an agreement?
An agreement is any understanding or arrangement reached between two or more parties. A contract is a specific type of agreement that, by its terms and elements, is legally binding and enforceable in a court of law, according to Diffen.com.