What is an internship agreement? Explanation and use

What is an internship agreement? It is the written agreement between an intern, an educational institution, and an internship company stating that the intern is gaining work experience to learn, and not to perform productive work. That learning objective is the legal core: in a genuine internship, learning comes first, and the intern does not perform actual work that primarily benefits the company. Consequently, there is no employment contract, and there is no entitlement to (minimum) wages. As soon as the intern participates in regular production, the internship may legally turn out to be an employment contract, with all the associated consequences.

The short answer

• An internship agreement stipulates that the intern learns, not that he works as an employee.
• It is a tripartite agreement: intern, educational institution, and internship company.
• For a genuine internship, there is no entitlement to minimum wage; an internship allowance is permitted, but not mandatory.
• If the learning objective is absent and the intern performs ordinary work, there may be a disguised employment relationship (Art. 7:610 BW).
• The actual performance counts, not the word “internship” above the contract.

What exactly is an internship agreement?

An internship agreement governs the legal relationship during an internship. Unlike an employment contract, it does not revolve around performing work for wages, but rather around acquiring knowledge and experience within an educational program. Therefore, three parties are usually involved: the intern, the school or educational institution, and the company where the internship takes place. The educational institution monitors the learning objective, while the company provides the practical environment and guidance.

In the agreement, you specify, among other things: the internship plan with learning objectives, the duration and scope of the internship, the supervisor, any internship allowance, agreements regarding confidentiality and intellectual property, and insurance and liability. The Working Conditions Act is also important: it applies to interns as well, so the company must ensure a safe workplace and instruction.

Internship or employment contract: the difference

The legal distinction revolves around three characteristics of an employment contract under Article 7:610 of the Dutch Civil Code: work, wages, and a relationship of authority. In the case of a genuine internship, the element of “work” in a legal sense is particularly absent. The intern works on learning objectives under supervision and does not perform productive work that primarily benefits the employer. Consequently, there is no employment contract and therefore no entitlement to minimum wage under the Minimum Wage and Minimum Holiday Allowance Act.

The boundary is not always clear. An intern may certainly participate and perform tasks, as long as learning remains the predominant goal and is balanced by genuine guidance. If the emphasis shifts to independent production work without learning supervision, the legal qualification shifts as well.

When is there a disguised employment relationship?

A disguised employment relationship exists if the intern functions in practice simply as an employee. Signs include: the intern replaces a permanent employee, works independently in production, receives little to no supervision, and there is hardly any concrete learning objective. In that case, the court may rule that an employment contract exists nonetheless, even if the contract states "internship." The label is not decisive; the actual performance counts.

The consequences are severe. In the case of disguised employment, wages and minimum wage, holiday allowance, protection against dismissal, and other labor law regulations apply retroactively. A company that employs an intern as cheap labor for years therefore runs a real risk of having to pay back wages.

A brief example: an SME places an “intern” independently behind the cash register and in stock five days a week, without an internship plan or supervisor. Formally, it is called a shadowing internship, but in fact, it replaces a sold job. That is precisely the situation in which the internship can legally constitute an employment contract.

Types of internships

• Shadowing internship (exploratory internship). Short and exploratory. The intern observes and performs light tasks under supervision. Often unpaid and based on a school model.
• Work placement (practical training). Longer and more intensive, often at MBO level (BBL/BOL). The intern participates more actively, but learning remains the goal. This is where the risk of disguised employment lies closest, so clear agreements are important.
• Graduation internship. At a university of applied sciences or a university, focused on a research or graduation assignment. The intern works more independently, but on a clearly defined learning assignment.

From a tax perspective, the following applies: an actual internship allowance is not mandatory, but it is permitted. An expense or internship allowance can be reimbursed tax-free within limits via a targeted exemption. However, in the case of disguised employment, the standard minimum wage and associated deductions apply.

Honest recommendation

You do not always need a lawyer. For a short, standard unpaid shadowing internship where the educational institution provides its own internship model, you can use that model perfectly well. As long as there is a clear learning objective, supervision, and a limited duration, and the intern does not replace a permanent employee, you run little risk.

Be sure to seek legal advice as soon as more is at stake: a longer work placement, an internship allowance, access to confidential data or intellectual property, or an intern working independently in production. In such cases, a sound internship agreement that prevents disguised employment is worthwhile. Unsure whether your situation still qualifies as a genuine internship? Then a brief legal review is cheaper than a subsequent tax assessment.

Want to know more or arrange it immediately? View the internship agreement, read how to draft an internship agreement , or discover what it costs to have an internship agreement drawn up.

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