Complete Guide: Creating an internship/externship program in your creative business
Internship programs can be so beneficial both to the interns and the small business owners. It’s a valuable experience, resume-building, and a potential long-term career opportunity for the intern and a wonderful option for creative business owners who wish to have a bit of a dating period before hiring on long term, as well as give back and educate the next generation of professionals in their field.
But how do you actually create your own internship program?
And what is an Extern exactly? How is that different from an Intern?
Our shop attorney & founder, Paige Hulse, has run successful internship & externship programs in both her law firm and this legal template shop for years. This summer Paige will have 9 interns on staff over the course of the summer, so she’s a wealth of experience and knowledge on the topic.
We’ll start with her steps for starting up an internship program in your small creative business and then move on to answering the most frequent legal questions we get asked regarding running such a program.
We’ll cover all that in this post, so you’ll confidently know…
how to legally start an internship program in your small business
6 Practical Steps to Run an internship program
Step 1: finding potential interns/externs
In the past, our process for finding interns and externs is to go to our Alma Mater and get in touch with the Dean of the relevant department. So when we’re looking for legal interns, we’ll get in touch with the Dean of the College of Law or if we’re looking for a marketing intern, we’ll find the contact details for the Dean of the College of Business.
We tend to reach out with a simple email to the Dean stating our desire to hire an intern and they tend to either send back a list of students looking for internships or send out a listing of potential internship locations by email for students to review.
It depends on the university and department as to how well they facilitate this, but generally, that’s the best place to start. Of course, if your Alma Mater isn’t so helpful with facilitating introductions, you could get in touch with any university or college.
Step 2: Complete the hiring process
Just like with a hiring process for hiring employees, we do something similar for interns and externs.
We tend to browse through applications, invite a selection of them to a first interview, and then if the candidate seemed promising we hold a second “interview” which is mostly just going over the scope of exactly what the intern would be doing so everyone is clear from the outset exactly what the internship entails.
Go through the usual questions you would in an interview and follow up with references if you wish.
Step 3: Send offer email
Next up we send a formal proposal in written format via email.
In the offer email we state what the intern/extern would be hired to do, for example; hired to be helping with trademarks, hired to be helping with contracts, etc., as well as compensation details.
We also prompt the potential candidate to reply stating their acceptance of the internship/externship offer if they’d like to move forward.
Step 4: sign legal agreements
Next up we get into the actual legal documents.
First, the intern/extern signs their Internship/Externship Agreement, that’s the agreement governing the work you two are doing together.
Also depending on the nature of your work, it maybe be worth having them sign a Non-Disclosure Agreement.
How do you determine if your intern should sign an NDA or not? Our rule of thumb is if the intern is going to come across anything that is considered confidential information, it would be a wise move to have an NDA signed.
For example, if you’re a photographer who is working on a celebrity wedding and the client had you sign an NDA, you would also need your intern to sign an NDA.
Also because we run business conservatively, we always also notify our clients of the new intern that’s been hired and that they’ve signed an NDA. We also ask our clients for their permission for the intern to sit in on meetings and follow along with our work.
(You may purchase the Internship Agreement our shop attorney has drafted and uses in her own business below. If you’re looking into hiring anyone, employee, contractor, or intern/extern, we also highly suggest purchasing our Fundamentals of Hiring e-book before you undertake the hiring process, and finally, we’ve also linked for you our NDA.)
Contracts mentioned:
Step 5: Onboard the new intern
From there we give every intern/extern an Internship Handbook. Inside the handbook are items such as a list of Roles & Responsibilities which gets specific into exactly what they’ll be doing, as well as who to contact, including useful contact details such as phone numbers and emails for important team members.
Step 6: Prove work completed for class credit
If the student is getting class credit for the work they did with you, the final step to wrap up the placement is to give proof of the work completed so the student may receive class credit. Each university generally has a procedure for this which they’ll communicate to you.
In our experience at the completion of the placement, we need to write a memo to the university stating the dates of the placement and that the student successfully completed the work.
Generally, the burden for ensuring class credit is received is on the student. That means they need to track their hours and report to the school weekly on the work they’re doing so the school may verify they’re doing enough to justify class compensation. And in our experience, the business owner just needs to sign off or write a memo at the end of the placement to verify completion.
Okay, now you know the 6 steps that go into hiring an intern or extern, let’s discuss the…
Most common legal questions about internships & externships
What’s the difference between an intern and an extern?
The word intern or internship program is most commonly used, however, there’s a distinct difference between an intern and an extern and when people say “intern” they often mean “extern.”
So what’s different?
An intern does not receive class credit for their work.
An extern does receive class credit for their work.
So if the person you’re bringing onto your team will in the end receive class credit, they’re classified as an extern and you’re actually running an ‘externship program’ instead of an ‘internship program.’
Are unpaid interns legal?
Technically yes you may have an unpaid intern legally.
If this is the case however, you need to have very specific wording in your contract with the intern that explains that the intern is not getting paid, that they understand that, and that they feel they are getting value (ie. learning) in return to compensate for not being paid.
It is very tricky (but not impossible) to have unpaid interns legally.
We suggest offering externships if you’re interested in getting a student to do an unpaid internship. In this case, the extern receives class credit as a substitute for monetary compensation. From an employment law perspective, it’s much easier to run an unpaid externship program rather than an unpaid internship program.
What’s the best way to ensure I’m bringing on an intern/extern legally?
The first and most important step is to have the intern/extern sign an Intern/Externship Agreement.
It is always legally correct to sign a contract with anyone you bring onto your team, but it is especially important for Interns & Externs because employment law is extremely strict for anyone under 18 and/or students.
(That means even if the Intern/Extern is over 18 if they’re a student, these strict employment laws still apply.)
The Internship/Externship Agreement is the vital contract that details particulars such as what is expected of both parties, who owns the work, what is confidential within the business, how many hours can the student intern work, what is the length of the agreement, and what happens to your job once the project wraps?
For your Internship/Externship program to be legal, you need that Intern/Externship Agreement.
The second important aspect of keeping your internship program legal is to file the correct tax documents.
For example, if you pay the intern/extern more than $600 USD in the year, you must file a 1099 for them.
Can I hire an intern if I’m not an LLC?
The answer here is yes, however, we always recommend business owners create an LLC.
We’ll give an example to demonstrate our recommendation.
If the intern/extern makes an error or does something which would warrant your business getting into legal hot water or your business being sued, without an LLC you are personally liable. If you had an LLC, the LLC would be liable.
We recommend business owners start an LLC from the very beginning, but especially if you’re considering starting an internship program and haven’t already created an LLC, now would be a wonderful time to do so.
Recommended reading: When Do You Need an LLC?
In order to legally start an LLC you’ll need an operating agreement. You may find operating agreements for an LLC here if you’re starting the LLC solo, or here if you’re starting the LLC with others.
Contracts mentioned:
Can I only hire an intern in my state or country?
Generally, you may hire anyone from anywhere, regardless of the state or country they’re in.
However, it’s always wise to double-check with your state and country hiring laws, as there may be some important laws you’ll want to be familiar with before hiring someone from another location.
Generally, the answer is yes, you may hire an intern from another state or country, but it’s worth looking into just to be sure. If your state or country doesn’t say anything or have any laws around hiring across state or country lines, then it’s fine.
Do I need to meet the requirements of the student’s university/college?
To understand the answer to this question it’s important to remember the difference between an Internship & an Externship.
Interns do not get class credit, externs do get class credit.
For an internship program, you do not need to meet any requirements from the student’s university/college because they’re not getting class credit for the work completed. If the student is over the age of 18, they may sign any contract they please, including your internship agreement.
For an externship program, the program is organized through the university and the school states what’s needed. Each school is different, so it’s worth having a discussion with the school in question about what their requirements are.
If you’re hiring an extern, then yes, you would need to check in with the university or college on what their requirements are and what paperwork/procedure you need to complete in order to hire an extern and for them to get their class credit.
