Most jurisdictions’ employment legislation will suggest that, as a default, if someone is doing work for your company (and unless they’re in business for themselves), then they are an employee and must be paid as such for the work performed. However, most jurisdictions permit unpaid internships, provided you meet some stringent guidelines. The internship must be part of a training program offered through a school, college, or university, OR must be a requirement for designated professions such as architecture or law, OR must (depending on local rules) meet conditions similar to those enumerated below:

  • (1) The training is similar to that which is given in a vocational school;
  • (2) the training is for the benefit of the intern, such as acquiring new knowledge or skills;
  • (3) the employer derives little, if any, benefit from the activity of the intern while he or she is being trained (cannot profit in any way from the intern’s efforts);
  • (4) the training doesn’t take someone else’s job;
  • (5) the employer isn’t promising the individual a job at the end of the training (even a suggestion that a paid job could result would be a disqualifier); and
  • (6) the individual has been told that he or she will not be paid.

To be perfectly clear, what all of this means is that you cannot avoid your obligations as an employer by simply calling someone an intern. The work arrangement must satisfy the conditions set out in the laws of your jurisdiction to truly be an internship. If your work arrangement does not satisfy these conditions, you may be liable for any wages owed.

Note that the above standards are generalized, and may be different in your jurisdiction. Check local legislation for the specific rules that apply to your business.

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive.