An Internship Agreement is a written document that sets out the terms and conditions of an internship placement between an organisation and an intern in England and Wales. It serves to clarify the nature of the arrangement, the responsibilities of both parties, and — critically — the employment status of the intern for the purposes of the National Minimum Wage Act 1998 and the Employment Rights Act 1996.

Internships in the United Kingdom occupy a legally complex area. Unlike countries such as France and Germany, where internships are specifically regulated by dedicated legislation, the UK has no standalone internship statute. Instead, the legal framework is determined by the general employment law principles that apply to all working relationships — primarily the question of whether the intern is a worker, an employee, or a genuine volunteer.

The distinction is not academic. Under section 54 of the National Minimum Wage Act 1998, any person who is a worker must be paid at least the National Minimum Wage (NMW). From April 2025, the National Living Wage (the NMW rate for those aged 21 and over) is set at £12.21 per hour. An organisation that fails to pay an intern who qualifies as a worker faces enforcement action from HMRC, financial penalties of up to 200 per cent of the arrears owed, and public naming by the Department for Business and Trade.

The Employment Rights Act 1996 defines a worker as someone who has a contract — whether express, implied, oral, or written — to personally perform work or services for another party. HMRC's internal guidance (NMWM04100) identifies key indicators of worker status: the individual is bound to attend, is subject to the organisation's control, is expected to produce work output, and may face consequences for non-compliance. A genuine volunteer, by contrast, has no contractual obligation to attend or work, is not subject to contractual control, and receives no payment other than reimbursement of genuine out-of-pocket expenses.

A well-drafted Internship Agreement does not determine the intern's legal status — that is a matter of fact and law determined by the substance of the working relationship. However, it provides valuable written evidence of what both parties intended and agreed, which can be critical if the arrangement is ever scrutinised by HMRC or challenged at an Employment Tribunal. Our template is drafted to comply with the laws of England and Wales and addresses both paid and unpaid internship scenarios.

An Internship Agreement should be put in place before any internship placement begins in England and Wales. While there is no specific statutory requirement to have a written internship agreement (unlike the written statement of employment particulars required by section 1 of the Employment Rights Act 1996 for employees), having a written agreement is strongly recommended for legal certainty and risk management.

Organisations in the private sector frequently offer internships to university students during summer breaks, to recent graduates seeking to gain work experience before entering permanent employment, and to career changers looking to build skills in a new sector. In each case, a written agreement helps both parties understand the terms of the arrangement and reduces the risk of disputes about pay, duties, or status.

A written Internship Agreement is particularly important when the internship is unpaid. As the government's guidance on GOV.UK makes clear, an intern who is set tasks, required to turn up at set times, and carrying out work that would otherwise need to be done by a paid employee is likely a worker and must be paid the National Minimum Wage. An unpaid internship is only lawful where the intern is a genuine volunteer with no obligation to attend or perform work, or where the placement forms part of a UK higher education or further education course.

Charities and voluntary organisations should also use an Internship Agreement to document the terms of any placements they offer. Section 44 of the National Minimum Wage Act 1998 provides a specific exemption for voluntary workers who work for a charity, voluntary organisation, associated fundraising body, or statutory body, provided they receive no monetary payments other than reimbursement of expenses. However, this exemption does not apply to private sector or commercial organisations — their interns must be paid the NMW if they are workers.

Organisations that offer placements as part of a university sandwich course, year-in-industry programme, or other higher education programme should also formalise the arrangement in writing. While student placements that form part of the course curriculum may be exempt from the NMW in certain circumstances, the exemption is narrow and the organisation must ensure it genuinely applies before relying on it.

An Internship Agreement also protects the intern. It sets out their rights to rest breaks, health and safety protection, and equal treatment, and provides a reference point if any issues arise during the placement.

A well-drafted Internship Agreement for use in England and Wales must address several key areas to provide legal clarity and protect both parties.

The identification of the parties should include the organisation's full legal name and registered address, and the intern's full name and home address. If the organisation is a limited company or LLP, the Companies House registration number should be included.

The placement details clause should describe the intern's role, department, duties, and learning objectives. This is important because HMRC and Employment Tribunals will examine the actual duties performed by the intern when determining whether they are a worker. If the duties described are productive work tasks that contribute to the organisation's commercial output, this is a strong indicator of worker status.

The duration clause should specify the start and end dates of the placement. Fixed-term placements are common for internships, and the agreement should make clear whether there is any expectation of extension.

The working hours clause should set out the expected hours and days of attendance. Under the Working Time Regulations 1998, workers are entitled to a rest break of at least 20 minutes where the working day exceeds 6 hours, a daily rest period of at least 11 consecutive hours between working days, and a weekly rest period of at least 24 hours in each seven-day period (or 48 hours in a 14-day period).

The remuneration clause is the most legally sensitive part of the agreement. If the internship is paid, the hourly rate must be at or above the applicable NMW/NLW rate. If the internship is unpaid, the agreement must clearly explain the voluntary nature of the arrangement and acknowledge that the NMW applies if the intern's status changes. Any attempt to waive the right to the NMW is void under section 49 of the National Minimum Wage Act 1998.

The health and safety clause must reflect the organisation's duties under the Health and Safety at Work etc. Act 1974, including the obligation to conduct risk assessments and provide adequate training. The insurance clause should confirm that the organisation holds employers' liability insurance (required by the Employers' Liability (Compulsory Insurance) Act 1969 if the intern is an employee or worker) and public liability insurance.

The employment status clause is essential. It should state that the agreement does not create a contract of employment, while explicitly acknowledging that the intern's actual legal status is determined by the substance of the working relationship and not by the label in the agreement. This reflects the approach taken by Employment Tribunals, which will look beyond contractual labels to the reality of the arrangement.

Optional clauses for confidentiality and intellectual property should be included where the intern will have access to sensitive information or will create original work during the placement. An equal opportunities clause confirms compliance with the Equality Act 2010, and a data protection clause addresses the organisation's obligations under the UK GDPR and Data Protection Act 2018.