Are Paid Internships Considered Employment?

Internships can help students gain practical experience.
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Internships are great opportunities that enable individuals to apply their skills and knowledge to practical settings. Whether it's paid or unpaid, acquiring an internship may be an individual’s first step upon entering a particular occupation or industry. The contractual relationship between an employer and an intern is the deciding factor in determining if the relationship falls under the definition of an employment relationship.

Work Opportunities

Internships are temporary work opportunities to allow individuals, including college students and recent graduates, to gain experience in their careers. Internships are considered either full-time or part-time work opportunities. The work opportunities may be affiliated with colleges and universities, whereby students are supervised by college faculty throughout their work experience; these types of work opportunities are usually unpaid, and students earn academic credit rather than compensation. Alternatively, individuals can acquire paid internship opportunities that might be affiliated with an educational institution.


Not all work opportunities equate to employment opportunities. Work opportunities may be classified as paid or unpaid. Unpaid internships designed to enable students to obtain academic credit do not fall within the meaning of employment. An employment contract between an employer and an employee exists when the employee performs services for the employer and the employer provides compensation for the work.

Paid Internships

A paid internship is considered employment when the intern enters into a contract with an employer and performs work in return for compensation. The intern must have a contractual employment relationship with an employer and receive some form of compensation.

Permanent Employment

Most internships are not permanent job opportunities, and in many instances they take place for just a small portion of the year. If the employment relationship between an intern and an employer lasts longer than an academic quarter or semester, employers generally set a specific time frame, such as one year, for interns to complete the internship. Whether the internship is permanent or non-permanent, when the intern receives compensation, it falls under the definition of employment.

Stipend Amounts

Some educational institutions encourage students to acquire internships with companies, and the colleges or universities pay a small stipend amount to the interns. These are considered paid internships, although the interns may not receive compensation from the company itself. In these instances, the educational institutions have contractual relationships with the companies, and the colleges provide the company with student interns. If the college or university pays the interns a small stipend to complete internships for specific companies, the intern has an employment relationship with the institution.

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