Introduction

So, you’ve decided to bring an intern on board—great. But now you’re wondering, “Do they need to sign a contract?” The answer is... well, it depends. U.S. laws around internships can be a bit murky and vary depending on the state and the nature of the internship (paid vs. unpaid). But regardless of the legal nitty-gritty, having a contract is almost always a good idea. Here’s why.

Read: What does time is of the essence mean in a business contract?

Why a contract is a smart move

Protect your business

Without a contract, things can get a little fuzzy. What if your intern comes up with the next billion-dollar idea during their stint? Or what if they leave and start sharing your company’s secrets with a competitor? A contract can cover you by including clauses on confidentiality and intellectual property. This ensures that any work the intern creates during their time with you belongs to the company, not them. It’s like putting a fence around your backyard to keep out nosy neighbours.

Set clear expectations

A contract helps outline what you expect from your intern and what they can expect from you. What are their responsibilities? What hours are they working? Are they getting paid, or is this a for-experience-only gig? This is especially important for unpaid internships, where confusion can lead to disgruntlement (or even legal trouble). Think of it as setting the ground rules for a good roommate agreement—no surprises, no drama.

Define the internship’s scope

If you don’t outline the scope of work, you might end up with an intern who thought they were going to be involved in high-level strategy sessions but ends up alphabetizing your filing cabinet. Defining the role and scope helps manage expectations and keeps the internship beneficial for both sides. It also prevents interns from being misclassified as employees, which can lead to compliance headaches down the road.

Read: Are oral contracts legal?

So, what should an intern contract include?

When drafting an internship contract, it’s essential to cover all bases to ensure a smooth and professional experience for both the intern and the company. Here’s a deeper dive into the key components every internship contract should include.

Internship duration

Set the start and end dates of the internship, including the expected weekly hours. This helps set boundaries and avoid confusion. Will they be with you for a semester, a summer, or until the end of the fiscal year?

If there’s flexibility in the schedule, note it, but be clear on the commitment required. This avoids any awkward “Wait, you’re still here?” moments when the expected end date rolls around. Include any probationary period if applicable, so both parties know when a review of the arrangement might take place.

Responsibilities

This is where you outline exactly what the intern will be doing. Will they be conducting market research, assisting with social media, or fetching coffee (hopefully not just that)? Be specific to prevent “scope creep,” where the intern ends up doing more—or less—than they signed up for.

If there are learning goals associated with the internship, include them here to ensure both parties are aligned on what’s expected. This not only clarifies their role but also helps the intern understand what skills they’ll gain from the experience.

Confidentiality

Interns often have access to sensitive information, even if they’re just sitting in on meetings. A confidentiality agreement is essential to protect your business from any leaks—intentional or accidental. Specify what kinds of information must remain confidential, such as client lists, trade secrets, or upcoming product launches.

Make it clear that this confidentiality responsibility continues even after the internship ends, so they don’t end up discussing your company’s secrets in their next job interview.

Intellectual property (IP) rights

If your intern will be creating anything—designs, code, marketing strategies—it’s crucial to establish that any work they produce belongs to your company. Include a clause stating that all intellectual property rights for work created during the internship are assigned to the company. This way, there’s no confusion or dispute if they come up with a groundbreaking idea or valuable content. You don’t want to end up in a legal tug-of-war over who owns that innovative social media campaign they developed.

Compensation and benefits (if any)

Outline whether the internship is paid or unpaid. If it’s unpaid, clarify if there are any perks, like a travel stipend, meals, or academic credit. For paid internships, specify the wage, payment schedule, and any other benefits. Don’t overlook small perks either—things like flexible hours or the opportunity to attend industry events can make a big difference to an intern.

Setting this out clearly in the contract avoids any misunderstandings or unmet expectations, ensuring the intern knows exactly what they’re getting out of the experience.

Supervision and mentorship

Outline who will be supervising the intern and what kind of support they can expect. Will there be regular check-ins? Who is their go-to person for questions or concerns? Defining this helps the intern feel guided and supported, rather than left to fend for themselves.

Learning objectives and evaluation

For internships that are educational in nature, it’s beneficial to include learning objectives. What skills or knowledge should the intern expect to gain by the end of their time with your company? Include how their performance will be evaluated—this could be through a mid-term review, a final assessment, or informal feedback sessions. This structure helps interns track their progress and provides clear expectations.

Termination clause

An internship doesn’t last forever, so it’s important to include a termination clause. This should outline under what circumstances either party can end the internship early. Maybe the intern isn’t meeting expectations, or perhaps a personal situation arises that requires them to leave. Clear terms here prevent misunderstandings and provide a formal process for ending the relationship if needed.

Read: How can I get out of a business contract?

Make sure you obey the law

Whether or not you’re required to have a formal contract depends on state laws and the structure of your internship program. To make sure you’re on the right side of the law, it’s wise to consult with a legal professional who knows your local regulations.

Conclusion

So, do interns have to sign a contract? No. However, while not every intern has to sign a contract, it’s generally a smart move for protecting your business and ensuring a smooth, professional relationship. It’s like having insurance—you hope you never need it, but you’ll be glad it’s there if you do. So, go ahead and get that paperwork in order. Your future self will thank you.

Read: How to create a late payment policy that clients respect

How Cobrief can help with contract review

Reading your business contracts can feel overwhelming as an owner-manager of a small to medium-sized business. That’s where Cobrief comes in. Cobrief helps business owners and operators review their business-to-business contracts for legal risks.

Upload your contract to Cobrief's AI contract review software, click review and you’ll get a list of all the risks, in plain English. This helps you decide whether to sign, negotiate or reject the terms of your contract, or hire a lawyer. Think of it as a heat map for your contracts.

Get started here.