Six templates for paid, unpaid, summer, and conversion internships. Download as DOCX or copy-paste.
The first internship offer letter I ever sent was a standard offer letter with the word intern typed over the job title and the salary line deleted. It took about four minutes. It was also wrong in three separate ways, and I only found that out later when a founder friend forwarded me a demand letter he had received over an internship that looked exactly like mine.
An internship offer letter is not a shortened employment offer. It carries a wage-and-hour question that a normal offer letter never has to answer, a fixed end date that fights with at-will language, an academic relationship that may involve a third party, and an IP problem created by someone who will hold your source code for eleven weeks and then go back to campus.
At FirstHR, we build onboarding software for small businesses that hire without a dedicated HR person, and interns are usually the first hires those companies make outside their own network. The six templates below cover the paid case, the unpaid or for-credit case, the summer cohort, the confidentiality and IP agreement, the conversion offer, and the extension letter.
TL;DR
Most for-profit small business internships must be paid at least the federal minimum wage of $7.25 per hour, or the higher state rate, plus overtime after 40 hours. Unpaid is lawful only when the DOL primary beneficiary test in Fact Sheet #71 favors the intern across seven factors. Academic credit alone does not qualify. Download the six templates below.
Paid or Unpaid: Settle This First
Decide whether the internship is paid before you write a single line of the letter, because the two documents are not variations on a theme. They rest on different legal footing and share almost no clauses. A paid intern is an employee. An unpaid intern, if the arrangement holds up, is not.
A paid intern is a non-exempt employee under the Fair Labor Standards Act. That means at least the federal minimum wage of $7.25 per hour under 29 U.S.C. 206, or the higher state or local rate where the intern works, plus overtime at time and a half after 40 hours in a workweek. It also means timekeeping, payroll registration in the state where the intern works, and inclusion in your workers compensation coverage.
An unpaid intern is outside the FLSA only if the Department of Labor primary beneficiary test favors the intern. That is a fact-specific analysis, not a form you fill in. Getting it wrong exposes you to back wages, liquidated damages, and in many states a multi-year lookback window.
Question
Paid internship
Unpaid or for-credit internship
Is the intern an employee?
Yes, non-exempt under the FLSA
No, if the primary beneficiary test holds
Minimum wage and overtime
Required
Not required if the test holds
Timekeeping
Required for every hour worked
Track hours anyway as evidence of the schedule
Form I-9
Required before or on day one
Not required, no employment relationship
Payroll tax and W-2
Yes
No
Workers compensation
Covered as an employee
Check your policy, coverage often does not extend
Unemployment insurance
Wages are reportable
Not applicable
School learning agreement
Optional
Effectively necessary
Realistic fit for a small for-profit team
Almost always the right answer
Rare, and hard to defend
The Cost of Guessing Wrong
If an unpaid internship is later found to be employment, the intern was owed minimum wage and overtime for every hour worked, and the FLSA generally allows an equal amount in liquidated damages on top. A court can reduce or waive those liquidated damages under 29 U.S.C. 260, but only if the employer proves it acted in good faith and had reasonable grounds to believe the arrangement was lawful, and meaning well is not the same as reasonable grounds. The safest position for most small businesses is simple: pay the intern, classify them as non-exempt, and stop worrying about the seven-factor analysis entirely.
The FLSA Primary Beneficiary Test, Factor by Factor
The primary beneficiary test asks a single question: in the economic reality of this relationship, who gets the main benefit, the intern or the company? The Department of Labor adopted the test in Fact Sheet #71, replacing the older six-part test that treated every element as mandatory.
Seven factors go into the analysis. Fact Sheet #71 notes that courts have described the primary beneficiary test as flexible and that no single factor is determinative, which cuts both ways. You cannot fail one factor and be automatically out, and you cannot pass one factor and be safe.
1
No expectation of compensationWhether the intern and the employer clearly understand that there is no expectation of compensation. Any promise of pay, present or future, suggests an employment relationship. Put the no-pay understanding in the letter and have the intern acknowledge it in writing.
2
Training like an educational environmentWhether the internship provides training similar to what an educational institution would give, including clinical and other hands-on training. Answering support tickets and stuffing envelopes is not training. Structured instruction with a named supervisor is.
3
Tied to a formal education programWhether the internship is tied to the intern's formal education program through integrated coursework or the receipt of academic credit. This is where a school learning agreement and a faculty sponsor matter.
4
Accommodates academic commitmentsWhether the internship accommodates the intern's academic commitments by corresponding to the academic calendar. Scheduling around midterms and finals is evidence. Requiring a fixed weekday shift that conflicts with class is evidence the other way.
5
Duration limited to beneficial learningWhether the internship's duration is limited to the period in which it provides the intern with beneficial learning. An unpaid internship that runs a full year on the same repetitive task has stopped teaching and started producing.
6
Complements rather than displaces paid workWhether the intern's work complements, rather than displaces, the work of paid employees while providing significant educational benefit. If you would have hired someone to do this task, it is displacement.
7
No entitlement to a paid job at the endWhether the intern and the employer understand that the internship is conducted without entitlement to a paid job at its conclusion. A pipeline program that everyone treats as an extended interview cuts against unpaid status.
Read those factors as a description of a teaching relationship, because that is what they describe. The unpaid internship the FLSA contemplates looks like a clinical rotation or a practicum, with a curriculum, a supervisor whose job includes instruction, and a school on the other end of it. It does not look like an extra pair of hands in August.
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Can a For-Profit Small Business Realistically Run an Unpaid Internship?
Honestly, almost never. The unpaid route is legally available to for-profit employers, but the structure the test requires is one that small companies are the least equipped to build, and the factors that most often decide a case are exactly the ones a small team fails. Plan on paying.
The problem is not that small businesses are careless. It is that the test rewards institutional infrastructure. Training that resembles an educational environment costs supervisor hours. A tie to a formal education program requires a relationship with a school. Accommodating the academic calendar means giving up schedule control. Ask yourself these five questions before you go anywhere near an unpaid arrangement.
Is there a school, a course, and academic credit behind this?
If your honest answer isNo. The intern found us on their own and just wants experience.Factors 3 and 4 are effectively unavailable. This is the most common fact pattern at small companies, and it is the one that fails.
Would we hire someone to do this work if the intern were not here?
If your honest answer isYes, or we would split it among the team.That is displacement under factor 6, and it is the factor plaintiffs' attorneys look at first.
Who supervises and teaches, and how many hours per week does that take?
If your honest answer isWhoever is free. Nobody has time for structured instruction.Factor 2 fails. Real training costs a supervisor real hours, which is exactly the cost small teams cannot absorb.
Does the schedule bend around midterms and finals?
If your honest answer isWe need coverage on fixed days.Factor 4 fails, and the arrangement starts to look like a job with a different label.
Does everyone quietly treat this as a tryout for a paid role?
If your honest answer isYes. That is the point.Factors 1 and 7 fail. A pipeline program is a recruiting activity, and recruiting activities get paid.
State law narrows the door further. The New York State Department of Labor evaluates unpaid interns at for-profit businesses against eleven criteria, six drawn from the older federal test and five of its own, and it treats them as conditions: no employment relationship exists only if all eleven are met. One of the eleven requires written notice, given before the internship starts, that the intern will receive no wages and is not an employee for minimum wage purposes.
Anti-discrimination law follows a separate track. California, New York, Oregon, and the District of Columbia extend harassment and discrimination protections to unpaid interns, and Illinois covers unpaid interns for sexual harassment under its Human Rights Act. The unpaid label does not remove those obligations.
The Practical Answer for Most Small Teams
Pay the intern at least your state minimum wage, classify them as non-exempt, and treat them as an employee for timekeeping and paperwork. The wage cost of a part-time intern over a summer is smaller than one hour with an employment attorney arguing about factor six, and paying removes the entire analysis from your risk register. Our guide to hiring interns walks through the sourcing and program side of the same decision.
Academic Credit Is Not a Payment Method
Academic credit does not make an internship lawfully unpaid. It is one factor of seven, and it is awarded by the school rather than by you. The student typically pays tuition for those credits, which means the credit arrangement transfers money away from the intern, not toward them.
Credit does real work in the analysis. It supports factor three, the tie to a formal education program, and it usually brings factor four along with it, because credit-bearing internships track the academic calendar. What credit cannot do is fix factor six. If the intern is doing work you would otherwise pay someone to do, no registrar can convert that into training.
If you do run a for-credit internship, get the school paperwork into the file. Ask for the learning agreement, name the faculty sponsor in the offer letter, and write the learning objectives down before the internship starts rather than reconstructing them afterward. Template 2 below has fields for all of it.
Paid and For-Credit Are Not Mutually Exclusive
Nothing stops you from paying an intern who is also earning academic credit, and it is often the cleanest setup available to a small company. The intern gets wages and credit, the school gets a supervised placement, and you get the schedule flexibility that comes with an employment relationship instead of a teaching relationship. Some academic programs require the placement to be unpaid, so confirm with the faculty sponsor before you promise a rate.
Six Internship Offer Letter and Agreement Templates
Each template covers a different point in the internship lifecycle. Download all six as one file, or take them individually. Every bracketed field needs to be filled in, and the warning block inside the unpaid template needs to be deleted only after you have actually done the analysis it describes.
Download All 6 Internship Templates
Paid internship, unpaid or for-credit, summer, confidentiality and IP agreement, conversion to full-time, and extension letter. All in one DOCX.
Template 1: Paid Internship Offer Letter
The default choice for a for-profit small business. Includes the non-exempt classification, overtime notice, timekeeping instructions, at-will language that survives the scheduled end date, and an explicit statement that no full-time role is promised.
Paid Internship Offer Letter
[Company Name]
[Company Address]
[City, State, ZIP]
[Date]
[Intern Full Name]
[Intern Address]
[City, State, ZIP]
Dear [Intern First Name],
We are pleased to offer you a paid internship with [Company Name]. This letter sets out the terms of the internship.
Work Location: [Office Address / Remote / Hybrid. For remote, list the city and state where you will work.]
DATES AND SCHEDULE
Start Date: [Start Date]
Scheduled End Date: [End Date]
Hours: Approximately [X] hours per week
Schedule: [Days and hours, for example Monday, Wednesday, Friday, 9:00am to 3:00pm]
Note: The scheduled end date is a planning date only. It does not create a promise of employment through that date.
COMPENSATION
Pay Rate: $[Amount] per hour
Pay Schedule: [Weekly / Bi-weekly / Semi-monthly]
FLSA Classification: Non-exempt. You will be paid for all hours worked, and any hours worked over 40 in a workweek will be paid at 1.5 times your regular rate.
You must record all hours worked using [timekeeping system]. Do not perform work off the clock at any time, including checking messages outside your scheduled hours.
BENEFITS
Interns are [eligible / not eligible] for the following: [paid sick leave as required by state or local law / paid holidays / commuter stipend / none].
Interns are not eligible for [health insurance / 401(k) / paid time off] unless required by applicable law or plan terms.
EMPLOYMENT RELATIONSHIP
Your internship with [Company Name] is at-will. Either you or [Company Name] may end the internship at any time, with or without cause or advance notice, before the scheduled end date. Nothing in this letter creates a contract of employment for a specific period.
This internship does not create any entitlement to a full-time position at the conclusion of the internship.
CONTINGENCIES
This offer is contingent on: [Form I-9 employment eligibility verification / background check / signed confidentiality and IP agreement / school documentation, if applicable].
NEXT STEPS
Please confirm your acceptance by signing and returning this letter by [Expiration Date].
Sincerely,
__
[Your Name]
[Your Title]
[Company Name]
ACCEPTANCE
I accept the paid internship described in this letter and understand that it is at-will and does not guarantee a job at its conclusion.
Signature: __
Printed Name: __
Date: __
Template 2: Unpaid or For-Credit Internship Offer Letter
Use only after the primary beneficiary analysis supports it. Documents the school connection, the faculty sponsor, written learning objectives, the no-compensation understanding, and a signed acknowledgment from the intern. Leaves room for a school countersignature.
Unpaid or For-Credit Internship Offer Letter
[Company Name]
[Company Address]
[City, State, ZIP]
[Date]
Dear [Intern First Name],
We are pleased to offer you an unpaid, educational internship with [Company Name] in connection with your academic program at [School Name].
WARNING BEFORE YOU USE THIS TEMPLATE
Do not send this letter until you have applied the U.S. Department of Labor primary beneficiary test (Fact Sheet #71) and confirmed that your state does not impose stricter conditions. If the company is the primary beneficiary of the work, the intern is an employee and must be paid at least minimum wage plus overtime. Academic credit alone does not make an internship lawfully unpaid.
POSITION
Title: [Intern Title]
Department: [Department]
Supervisor: [Supervisor Name], [Supervisor Title]
Location: [Location]
DATES AND SCHEDULE
Start Date: [Start Date]
End Date: [End Date, aligned to the academic term]
Hours: Approximately [X] hours per week, scheduled around your class schedule and exam periods
ACADEMIC CONNECTION
This internship is tied to your formal education program at [School Name].
Course or program: [Course number and name]
Academic credit: [X] credits, awarded by [School Name], not by [Company Name]
Faculty sponsor: [Faculty Name], [Email]
School learning agreement: [attached / on file]
LEARNING OBJECTIVES
The internship is designed to provide training similar to what you would receive in an educational environment. During the internship you will learn:
1. [Skill or competency 1, with how it will be taught and supervised]
2. [Skill or competency 2]
3. [Skill or competency 3]
Supervision: You will work under the direct supervision of [Supervisor Name], who will meet with you at least [weekly] to review your work and provide feedback.
NO COMPENSATION AND NO EMPLOYMENT
There is no expectation of compensation for this internship. You will not receive wages, salary, a stipend, or any other payment, and you are not an employee of [Company Name] for minimum wage purposes.
You will not displace any paid employee. Your work will complement the work of paid staff and is structured for your educational benefit.
This internship does not entitle you to a paid job with [Company Name] at its conclusion, and neither party expects one.
EXPENSES
[Company Name] will reimburse [parking / transit / required materials] on submission of receipts. Reimbursement of actual documented expenses is not compensation.
END OF INTERNSHIP
The internship ends on [End Date] or earlier if either party chooses to end it. Either party may end the internship at any time for any reason.
ACKNOWLEDGMENT
I understand that this internship is unpaid, that I am not an employee of [Company Name] for minimum wage purposes, that I will receive no wages or stipend, and that the internship does not entitle me to a paid position at its conclusion.
Intern Signature: __
Printed Name: __
Date: __
Company Signature: __
[Name], [Title]
School Acknowledgment (if required by the program):
Faculty Sponsor Signature: __
Date: __
Template 3: Summer Internship Offer Letter
Built for a fixed-length seasonal cohort. Adds program structure by week, a mid-point review, equipment return, an optional housing stipend line, and the confidentiality agreement as a contingency of the offer.
Summer Internship Offer Letter
[Company Name]
[Date]
Dear [Intern First Name],
We are pleased to offer you a paid summer internship with [Company Name] for the [Summer Term Year] season.
INTERNSHIP DETAILS
Title: [Summer Intern Title]
Department: [Department]
Supervisor: [Supervisor Name], [Supervisor Title]
Location: [Location]
Cohort start: [Orientation Date]
TERM
First Day: [Start Date]
Last Day: [End Date]
Total length: [10 / 12] weeks
Hours: [40] hours per week, [Monday to Friday], [9:00am to 5:00pm]
COMPENSATION
Pay Rate: $[Amount] per hour
Pay Schedule: [Bi-weekly]
FLSA Classification: Non-exempt. Overtime at 1.5 times your regular rate for hours worked over 40 in a workweek. All overtime must be approved in advance by your supervisor.
Housing or relocation stipend: $[Amount], paid [on the first pay date]. [If the intern leaves before [Date], the stipend is repayable as permitted by applicable state law.]
PROGRAM STRUCTURE
Week 1: Orientation, systems access, safety and policy training, project assignment
Weeks 2 to [X]: Project work with weekly one-on-one feedback from your supervisor
Mid-point: Written mid-internship review at approximately week [5 or 6]
Final week: Project presentation, final review, exit conversation and return of equipment
EQUIPMENT AND ACCESS
[Company Name] will provide: [laptop / badge / software accounts].
All equipment and accounts must be returned or deactivated on or before your last day.
CONFIDENTIALITY AND IP
As a condition of this internship, you must sign the attached Internship Confidentiality and Intellectual Property Agreement before your first day.
EMPLOYMENT RELATIONSHIP
This internship is at-will and ends on [End Date] unless ended sooner by either party. Nothing in this letter guarantees employment through the end date or a full-time offer afterward. Any full-time offer, if extended, will be made in a separate written letter.
CONTINGENCIES
Form I-9 employment eligibility verification on or before your first day, [background check], and a signed confidentiality and IP agreement.
Please accept by [Expiration Date].
__
[Your Name], [Title]
[Company Name]
ACCEPTANCE
Signature: __
Printed Name: __
Date: __
Template 4: Internship Agreement With Confidentiality and IP Assignment
The separate signed agreement that the offer letter references. Covers confidential information, work product ownership, a coursework and personal project carve-out, portfolio permission, the statutory whistleblower notice, and return of company property.
Internship Agreement With Confidentiality and IP Assignment
INTERNSHIP AGREEMENT
CONFIDENTIALITY AND INTELLECTUAL PROPERTY
This Agreement is entered into between [Company Name] ("Company") and [Intern Full Name] ("Intern") effective [Effective Date].
1. SCOPE OF THE INTERNSHIP
Title: [Intern Title]
Supervisor: [Supervisor Name]
Term: [Start Date] through [End Date]
Status: [Paid, non-exempt employee / Unpaid educational internship under the applicable primary beneficiary analysis]
2. CONFIDENTIAL INFORMATION
"Confidential Information" means non-public information of the Company or its clients that the Intern learns during the internship, including customer and prospect lists, pricing, source code, product plans, unreleased designs, financial data, employee information, vendor terms, and anything marked confidential.
The Intern will not use or disclose Confidential Information except as required to perform assigned work, during the internship or after it ends. This obligation continues after the internship ends and has no expiration date for trade secrets.
Confidential Information does not include information that is or becomes public through no fault of the Intern, that the Intern already lawfully knew, or that the Intern lawfully receives from a third party without a duty of confidence.
3. PROTECTED RIGHTS AND STATUTORY NOTICE
Nothing in this Agreement limits the Intern's right to report possible violations of law to a government agency, to participate in an agency investigation, or to discuss wages or working conditions with others.
Defend Trade Secrets Act notice: An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
4. OWNERSHIP OF WORK PRODUCT
All work product the Intern creates within the scope of the internship, using Company time, equipment, systems, or Confidential Information, including code, designs, copy, research, data sets, and documentation, is owned by the Company.
To the extent any such work product is not automatically owned by the Company, the Intern assigns all right, title, and interest in it to the Company, and agrees to sign any documents reasonably needed to record that assignment.
The Intern will disclose to the Supervisor any work product created during the internship.
5. PRIOR AND OUTSIDE WORK
The Intern lists below any inventions, code, or creative work owned by the Intern before the internship that the Intern does not assign to the Company. If none, write "None."
__
__
Coursework, class projects, and personal projects created on the Intern's own time, on the Intern's own equipment, and without Company Confidential Information remain the Intern's property. If the Intern wants to use Company work in an academic portfolio, the Intern must request written approval from the Supervisor first.
6. SCHOOL AND PORTFOLIO USE
Portfolio approval request: The Company [will / will not] permit the Intern to include a redacted description of internship work in an academic portfolio, subject to written approval of the specific materials by [Supervisor / Marketing].
7. COMPANY PROPERTY
On the last day of the internship, or earlier on request, the Intern will return all Company property, including [laptop, badge, keys, documents], and will delete Company data from personal devices and personal accounts.
8. NO GUARANTEE OF EMPLOYMENT
This Agreement does not create an employment contract for any specified period and does not entitle the Intern to a paid position at the end of the internship. Where the internship is a paid position, it is at-will and may be ended at any time by either party.
9. GOVERNING LAW
This Agreement is governed by the laws of [State where the intern performs the work].
10. ENTIRE AGREEMENT
This Agreement, together with the internship offer letter, is the entire agreement on these subjects and replaces any prior discussions.
SIGNATURES
Intern: __ Printed: _ Date: ___
Company: _ Printed: _ Date: ___
Parent or guardian, if the Intern is a minor:
Signature: ______ Printed: _ Date: ___
Template 5: Intern to Full-Time Conversion Offer Letter
A full offer letter for an intern you are hiring permanently. Restates salary, FLSA classification, and benefits eligibility, confirms the internship agreement stays in force, and answers the service-date question that trips people up on accruals.
Intern to Full-Time Conversion Offer Letter
[Company Name]
[Company Address]
[Date]
Dear [Intern First Name],
Your internship ends on [Internship End Date], and we would like you to stay. We are pleased to offer you the full-time position of [Job Title] at [Company Name].
POSITION
Job Title: [Job Title]
Department: [Department]
Reports To: [Manager Name], [Manager Title]
Start Date as a full-time employee: [Start Date]
Work Location: [Location]
Employment Type: Full-Time
COMPENSATION
Base Salary: $[Amount] per year, paid [bi-weekly / semi-monthly]
FLSA Classification: [Exempt / Non-exempt]
[If exempt, confirm the role meets both the salary basis and the duties test before using this classification.]
Sign-on bonus: $[Amount], paid [on the first pay date]. [Repayment terms, if any, as permitted by state law.]
BENEFITS
You will be eligible to participate in [Company Name]'s benefits program, subject to the terms of each plan:
•Health insurance: [Medical / Dental / Vision], eligible [on date or after waiting period]
•401(k): [details]
•Paid time off: [X] days per year
•Paid holidays: [X] company-observed holidays
SERVICE DATE AND TENURE
Your internship service from [Internship Start Date] to [Internship End Date] [will / will not] count toward [PTO accrual / 401(k) eligibility / service awards]. Benefit plan eligibility is governed by the plan documents.
EXISTING AGREEMENTS
The Internship Confidentiality and Intellectual Property Agreement you signed on [Date] remains in full effect and continues to apply to your full-time employment, in addition to any employee agreements you sign now.
EMPLOYMENT RELATIONSHIP
Your employment with [Company Name] is at-will. Either you or [Company Name] may end the employment relationship at any time, with or without cause or advance notice. Nothing in this letter creates a contract of employment for a specific period.
CONTINGENCIES
This offer is contingent on: [background check / updated Form I-9 documentation, if your work authorization category changed / signed employee agreements].
Please confirm your acceptance by signing and returning this letter by [Expiration Date].
We have enjoyed working with you and we are glad you are staying.
Sincerely,
__
[Your Name], [Title]
[Company Name]
ACCEPTANCE
I accept the offer of full-time employment described in this letter.
Signature: __
Printed Name: __
Date: __
Template 6: Internship Extension Letter
A short letter for extending an internship past its original end date. States the new end date, the reason, the schedule, the rate, and a list of the things the extension does not change, including at-will status and the absence of any job guarantee.
Internship Extension Letter
[Company Name]
[Date]
Dear [Intern First Name],
Your internship is currently scheduled to end on [Original End Date]. We would like to extend it.
EXTENSION TERMS
New End Date: [New End Date]
Reason for extension: [Project [Name] continues through [Date] / You asked for additional hours during the fall term / Your school program requires additional hours]
Title: [Same as before / New Title]
Supervisor: [Supervisor Name]
SCHEDULE DURING THE EXTENSION
Hours: Approximately [X] hours per week
Schedule: [Days and hours]
[If the intern is returning to classes, restate the schedule so it accommodates the academic calendar.]
PAY DURING THE EXTENSION
Pay Rate: $[Amount] per hour [unchanged / increased from $[Prior Rate]]
FLSA Classification: Non-exempt. Overtime at 1.5 times your regular rate for hours over 40 in a workweek.
[For an unpaid, for-credit internship: confirm that the extension still corresponds to the academic term and still provides beneficial learning. An internship that keeps running after the learning has stopped is difficult to defend as unpaid.]
WHAT DOES NOT CHANGE
•The internship remains at-will and may be ended by either party at any time.
•The extension does not create a promise of employment through the new end date.
•The extension does not entitle you to a full-time position afterward.
•The Internship Confidentiality and Intellectual Property Agreement you signed on [Date] remains in full effect.
Please confirm by signing below on or before [Response Date].
__
[Your Name], [Title]
[Company Name]
ACKNOWLEDGMENT
I accept the extension of my internship on the terms above.
Signature: __
Printed Name: __
Date: __
These templates handle the internship-specific clauses. For regular full-time and part-time hires, the standard offer letter templates cover the state pay transparency and remote-hire fields that interns rarely trigger, and the employment contract templates cover fixed-term arrangements that are genuinely contractual.
Six Clauses a Standard Offer Letter Does Not Have
An internship letter needs six clauses that never appear in a normal offer letter, and each one exists because internships have an end date, a school on the other side, and a candidate who may be under 18. Skipping any of them is where the trouble starts.
A defined term that does not become a promiseInterns need a start and an end date, because the whole arrangement is time-boxed. The risk is that a stated end date reads as a guarantee of work through that date. Call it a scheduled end date, then state plainly that either side may end the internship earlier.
The academic connection, written outSchool name, course, number of credits, faculty sponsor, and whether a learning agreement is on file. On a paid internship this is optional context. On an unpaid one it is a load-bearing part of the file.
Timekeeping instructions for a paid internPaid interns are non-exempt. Tell them how to record hours, that overtime needs approval, and that off-the-clock work is prohibited. Students often assume answering a message at night is a favor rather than compensable time.
Confidentiality and IP assignment as a conditionMake the signed agreement a contingency of the offer, not a form you hand over in week three. Interns touch customer data, prototypes, and unreleased work, and they leave in weeks.
A conversion clause that promises nothingSay how conversion decisions get made and when, and say clearly that no full-time offer is promised. Any real offer arrives later in a separate letter.
Parent or guardian signature for minorsIf the intern is under 18, add a guardian signature line and check your state's youth employment rules for hours, hazardous occupations, and any work permit requirement before the start date.
The ordering matters as much as the content. Put the dates and schedule near the top, because that is the section the intern actually reads and the section their school will ask about. Put the at-will and no-guarantee language in its own labeled block so nobody can claim they missed it in a paragraph about benefits.
At-Will Language and a Fixed End Date in the Same Letter
A scheduled end date and at-will employment are not contradictory, but only if you say so explicitly. Left alone, a sentence saying the internship runs from June 2 through August 15 reads like a promise of eleven weeks of work, which is exactly the implied contract that at-will employment is supposed to prevent.
The fix is three sentences in one labeled section. Call the date a scheduled end date. State that either party may end the internship at any time, with or without cause or advance notice, before that date. State that nothing in the letter creates a contract of employment for a specific period or entitles the intern to a position afterward.
Phrase in the letter
Problem it creates
Replacement
The internship will run from June 2 to August 15
Reads as a guaranteed eleven weeks of work
Scheduled end date: August 15. Either party may end the internship earlier.
You will be considered for a full-time role at the end
Sets an expectation of a job and undercuts factor seven on an unpaid internship
Conversion decisions are made at the company discretion and no position is promised.
Your summer salary will be $6,000
A lump sum implies a fixed term and hides the hourly rate a non-exempt worker needs
$[X] per hour, paid bi-weekly, non-exempt, overtime after 40 hours.
We expect you to be available whenever the team needs you
Scheduled hours are [X] per week. All hours must be recorded. Overtime requires prior approval.
This is a training position, so hours are flexible
Suggests hours worked are not compensable time
All time worked is paid time. Report every hour you work.
One more thing that trips people up: an intern who is a paid employee is non-exempt no matter how impressive the title is. There is no intern exemption in the FLSA, and the salary and duties tests behind exempt classification are not something a student in a temporary learning role will meet. Applicant tracking is coming soon to FirstHR, and the classification decision belongs in the offer letter regardless of how the candidate reached you.
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Interns need a signed confidentiality and IP assignment agreement before their first day, and the offer letter should list it as a contingency. Interns see customer data, prototypes, and unreleased work on a compressed timeline, then leave with all of it in their heads and often in a portfolio draft.
Two clauses in a standard employee agreement need editing for interns. The first is the assignment scope. A boilerplate clause that assigns everything the person creates during the relationship will sweep in class projects and personal work, which is unfair, unenforceable in several states, and a fast way to lose a good candidate. Carve out work the intern creates on their own time and equipment without company confidential information.
The second is the portfolio question. Design, marketing, and engineering interns will want to show their work when they apply for jobs. Decide in advance whether redacted portfolio use is permitted and who approves specific materials, then write the answer into the agreement instead of handling it by email in November.
The Whistleblower Notice Is Not Optional Boilerplate
Every agreement covering trade secrets should include the immunity notice required by the Defend Trade Secrets Act at 18 U.S.C. 1833(b). An employer that omits the notice cannot recover exemplary damages or attorney fees in a trade secret action against that person. It is one paragraph, it is already in Template 4, and leaving it out only costs you. Our NDA templates include the same language for employees and contractors.
Keep the confidentiality obligation alive after the internship ends, and make the property return concrete. Name the laptop, the badge, and the accounts, and set the return for the last day rather than sometime after it. An intern who has already flown home is a hard person to collect a laptop from.
The Conversion-to-Full-Time Clause
The conversion clause in an internship offer letter should describe the process and promise nothing. Say when conversion decisions are made, who makes them, and that any offer will arrive in a separate written letter. Anything stronger creates an expectation that hurts you legally on an unpaid internship and commercially on a paid one.
Conversion is the main reason small companies run internships at all, and the numbers support it. According to the National Association of Colleges and Employers 2026 Internship and Co-op Report, employers converted 63.1 percent of their 2024 to 2025 interns into full-time hires, the highest rate in five years, and the acceptance rate on those offers reached 88.3 percent. An intern who accepts already knows the work, the tools, and the team.
When you do convert, send a real offer letter rather than an email saying congratulations. Template 5 covers the fields that get forgotten: the FLSA classification for the new role, benefits eligibility dates, and whether internship service counts toward accruals and plan eligibility. Answer the service-date question explicitly, because the intern will ask about their PTO balance in week two.
Conversion step
Timing
Document
Set the conversion criteria with the supervisor
Before the internship starts
Internal note, not the offer letter
Mid-internship review
Roughly the halfway point
Written review shared with the intern
Decide and check budget
Two to three weeks before the end date
Internal approval
Send the full-time offer
At least two weeks before the last day
Conversion offer letter, Template 5
Collect signature and new-hire paperwork
Before the internship end date
Signed offer, updated agreements
No offer: close it cleanly
Before the last day
Exit conversation and feedback
If you are not converting, say so before the last day and give real feedback. Interns talk to their classmates and to their career office, and a silent ending costs you the next three candidates from that school. A short exit conversation using intern exit interview questions gets you honest feedback about your program while the details are still fresh.
Paperwork and Payroll Setup for a Paid Intern
A paid intern is an employee, so they get the full new-hire paperwork stack. Form I-9 must be completed within the standard deadline, with the intern section on or before the first day and the employer section within three business days of the start, per USCIS I-9 Central.
Beyond the I-9 come the federal and state withholding forms, direct deposit, your handbook acknowledgment, and any state-specific wage notice. Register for payroll in the state where the intern physically works, which for a remote intern is the state they are sitting in, not your headquarters. The new hire paperwork checklist covers the full sequence.
Two items are easy to miss. Confirm that your workers compensation policy covers interns, paid or unpaid, before the start date. And check your state youth employment rules if the intern is under 18, since hour limits, prohibited occupations, and work permits vary by state and by age. Applicant tracking is coming soon to FirstHR, and the onboarding steps that follow acceptance run in the platform today.
Run the Intern Through Real Onboarding
The most common complaint I hear from interns is that nobody set them up. A short onboarding path with accounts provisioned, a named supervisor, a first-week plan, and a mid-point review is the difference between an intern who converts and one who quietly counts down. FirstHR runs the same onboarding workflow for a twelve-week intern as for a permanent hire, with e-signature on the offer and the internship agreement built in. Applicant tracking is coming soon to FirstHR.
Interns are not contractors. Issuing a 1099 to a summer intern who works your hours, on your equipment, under your supervision is worker misclassification with a different label, and it is one of the fastest ways to draw a state audit. If the working relationship looks like the one described in these templates, the person is an employee. The distinction between an employee and an independent contractor turns on control, not on how long the engagement lasts.
Key Takeaways
Decide paid or unpaid before drafting, because the two letters share almost no clauses and rest on different legal footing.
The DOL primary beneficiary test in Fact Sheet #71 weighs seven factors with no single factor decisive, and academic credit supports only two of them while fixing none of the ones that usually decide a case.
For a for-profit small business the unpaid route is legally available but rarely defensible, because the test rewards institutional training infrastructure most small teams do not have.
Call the end date a scheduled end date and pair it with explicit at-will language, or the date reads as a promise of work.
Make a signed confidentiality and IP agreement a contingency of the offer, with a coursework carve-out and the Defend Trade Secrets Act notice.
Convert with a separate full offer letter that answers the service-date question for accruals and benefits eligibility.
Frequently Asked Questions
Do you have to pay interns?
In most cases at a for-profit company, yes. Under the Fair Labor Standards Act, anyone who is an employee must receive at least the federal minimum wage of $7.25 per hour, or the higher state or local rate, plus overtime after 40 hours in a workweek. An intern is only outside that rule when the Department of Labor primary beneficiary test shows the intern, not the company, is the main beneficiary of the arrangement. The test weighs seven factors, including academic credit, structured training, and whether the intern displaces paid staff. Most small business internships fail several of those factors, which means the intern is an employee and must be paid.
What is the FLSA primary beneficiary test?
The primary beneficiary test is the standard the Department of Labor uses in Fact Sheet #71 to decide whether an intern at a for-profit employer is an employee entitled to minimum wage and overtime. It looks at the economic reality of the relationship through seven factors: a shared understanding of no compensation, training similar to an educational environment, a tie to a formal education program, accommodation of academic commitments, a duration limited to beneficial learning, work that complements rather than displaces paid employees, and a shared understanding that no paid job is promised at the end. Fact Sheet #71 notes that courts have described the test as flexible, and no single factor decides the outcome.
Does giving academic credit make an internship legally unpaid?
No. Academic credit is one factor of seven, not a waiver of wage law. Credit is awarded by the school, not by the employer, and it costs the student tuition rather than paying them. Credit strengthens factors three and four of the primary beneficiary test, but it does nothing for the factors that usually decide the case: whether the intern displaces paid employees, whether the training resembles an educational environment, and whether the duration is limited to beneficial learning. An unpaid intern doing production work for a for-profit business is an employee under the FLSA whether or not a registrar recorded three credit hours.
What should an internship offer letter include?
An internship offer letter should include the title, department, named supervisor, work location, start date, scheduled end date, weekly hours and schedule, pay rate with FLSA classification for a paid internship, timekeeping instructions, which benefits apply, an at-will statement that survives the stated end date, a clear statement that no full-time job is promised, contingencies such as Form I-9 verification and a signed confidentiality and IP agreement, an acceptance deadline, and signature lines. If the intern is under 18, add a parent or guardian signature line. Unpaid or for-credit internships add the school name, course, credits, faculty sponsor, written learning objectives, and a signed acknowledgment that there is no expectation of compensation.
Is an internship offer letter a contract?
A well-drafted internship offer letter is not an employment contract, but a badly drafted one can become something close to it. The specific risk with internships is the end date. Writing that the internship runs from June through August can read as a promise of work for that full period, which is the opposite of at-will. Label it a scheduled end date, state that either party may end the internship earlier with or without cause, and add that nothing in the letter creates a contract of employment for a specific period. The separate internship agreement covering confidentiality and IP is a real contract and is meant to be one.
Can interns sign an NDA and an IP assignment agreement?
Yes, and they should. Interns see customer data, prototypes, pricing, and unreleased work, and they leave in weeks rather than years, so the exposure is real. Make the signed agreement a condition of the offer so it is executed before the first day. Two intern-specific issues need attention. First, carve out coursework, class projects, and personal work created on the intern’s own time and equipment, or the assignment clause will sweep in material the intern needs for school. Second, include the Defend Trade Secrets Act whistleblower immunity notice, because omitting it limits the remedies available to the employer in a later trade secret case.
How do you convert an intern to a full-time employee?
Send a separate full-time offer letter rather than amending the internship letter. The conversion letter restates the job title, manager, salary, FLSA classification, benefits eligibility, and at-will status, and it confirms that the confidentiality and IP agreement signed at the start of the internship stays in effect. Decide explicitly whether internship service counts toward paid time off accrual, retirement plan eligibility, or service awards, and put that answer in writing. According to the National Association of Colleges and Employers 2026 Internship and Co-op Report, employers converted 63.1 percent of their 2024 to 2025 interns to full-time hires, and the acceptance rate on those offers reached 88.3 percent.
Can you extend an internship past the original end date?
Yes. Send a short written extension letter that states the new end date, the reason for the extension, the schedule, the pay rate, and confirmation that the confidentiality and IP agreement remains in effect. Repeat the at-will language and the statement that no full-time position is promised. Send it before the original end date passes, so there is never a stretch of time when the intern is working on terms nobody has documented. For a paid internship an extension is straightforward. For an unpaid or for-credit internship it is riskier, because the primary beneficiary test asks whether the duration is limited to the period of beneficial learning. An internship that keeps going after the learning has plateaued is difficult to defend as unpaid.
