Educational institutions of all kinds often utilize the services
of volunteers or so-called interns to assist with coaching sports
or other extracurricular activities, and to participate in programs
that are mutually beneficial. But the United States Labor
Department (DOL) has issued clear guidance with respect to unpaid
internships and the circumstances under which an educational
institution's current staff may be converted to volunteers, or
others may serve as volunteers for certain purposes.
Given the liquidated (double) damages and potential personal
liability possible under federal wage and hour laws, any
institution that goes forward with any program for volunteers or
interns does so at its peril if not mindful of these
guidelines.
Interns
Failure to comply with the DOL's rules permitting nonemployee
intern status can be particularly costly. Just last summer, a New
York federal court ruled that Fox Searchlight Pictures had violated
the federal Fair Labor Standards Act (FLSA) as well as New York
State's minimum wage laws by not paying its production interns
for their work on the movie set for "Black Swan."
The judge concluded that two interns worked essentially as regular
employees and that the environment offered for these interns by Fox
Searchlight Pictures did not foster educational advancement or
otherwise meet the six-prong test for nonemployee status under wage
and hour laws. The FLSA makes clear that all
six of the following criteria must be met, or an intern
will be regarded as an employee, entitled to at least minimum wage
for all regular hours worked, and possibly overtime at a rate of
time and one-half:
- The training is similar to that which would be provided in a vocational school;
- The training is primarily for the benefit of the student or trainee;
- The trainee or student does not displace regular employees and works under close observation;
- The employer derives no immediate advantage from the activities and on occasion, its operations may actually be impeded or impaired by the presence of the intern;
- The trainee or student is not necessarily entitled to a job at the conclusion of the internship period; and
- The employer and the trainee understand the latter is not entitled to wages for time spent in alleged training.
The judge in the Fox Searchlight Pictures case easily concluded
the interns were employees because their duties were primarily
clerical, including taking lunch orders, answering phones,
arranging other staff's travel, and otherwise undertaking
activities that ordinarily would have been performed by regular
employees.
Mindful of the DOL's aggressive posture in enforcing its
standards, every institution considering an internship program
should adopt these safe harbors:
- make sure that every intern or trainee should be enrolled in a legitimate educational program or course of study directly related to the internship;
- pay the intern at least minimum wage for all hours worked, unless the internship is for college or higher-education credit and there is an express written agreement with the college, university, or institution of advanced learning offering the program of study agreeing to the principles set out by the DOL;
- remember that an internship is not an "entry-level job," or a source of free labor; and
- focus the thrust of the internship program on education and learning of the trainee.
If there is any doubt whatsoever about the six DOL factors being met, interns and trainees should be paid at least minimum wage for all regular hours worked.
Volunteers
There has similarly been abuse with volunteers providing services
in a school setting. In passing and amending the FLSA, Congress
made clear it had no desire to discourage volunteer activities
undertaken for civic, charitable, or for humanitarian purposes. But
Congress has created an important distinction between persons
volunteering time to a public school or school system versus
persons volunteering time for private, for-profit
schools.
Not only does the FLSA itself exclude from the definition of
"employee" those working for public agencies including
government-operated schools, but the regulations under the FLSA
make it virtually impossible for employees of a private, for-profit
entity to donate their services to that concern. While there
might be the occasional exception when employees or supporters of
for-profit educational entities may be permitted to volunteer or
donate services, the DOL has never identified any such
circumstances, and it would be very dangerous for any for-profit
institution to assume donation or volunteering of its
employees' or parents' services is a prudent
idea.
Although not arising from a school setting, we can obtain some
guidance from a 1996 Opinion Letter of the DOL involving non-profit
community and church groups offering to provide volunteer members
to provide gift-wrapping services for a for-profit concern. Despite
the holiday-season setting, the DOL was not convinced the
volunteers from nonprofit agencies could perform the gift-wrapping
services without being paid, finding that they should be regarded
as employees.
Even in circumstances involving public schools or not-for-profit
educational entities, there are very limited circumstances under
which a school's employees, parents or supporters may serve as
volunteers. First, the activities must truly be undertaken for the
individual's own personal, humanitarian, charitable, religious,
or public-service motives. Secondly, the services must be of the
kind typically associated with volunteer work (such as parents
helping out in the classroom or lunchroom, or reading to students
in the library). Moreover, the volunteer may not displace regular
employees or impair employment opportunities for others. In those
cases where the person providing the volunteer service is also an
employee, the services provided must be completely unrelated to the
employment relationship.
Thus, a member of the coaching staff at a not-for-profit school or
public school could not provide volunteer coaching assistance at a
basketball clinic offered on the weekend. Such services would
merely be an extension of the employment relationship. Similarly, a
secretarial or clerical employee of a not-for-profit or public
school could donate his or her services, but not if the donated
services are primarily clerical in nature.
Our Advice
Best practice tips include advice to schools to thoroughly
evaluate all volunteer relationships. In the case of
for-profit educational institutions, there is virtually no set of
circumstances under which volunteers should be permitted to perform
core school activities for which persons would ordinarily be paid
as employees. In the case of employees of public and not-for-profit
schools, it is imperative their volunteerism not resemble the
duties and responsibilities they are regularly paid to
undertake.
Similarly, the DOL might make a finding of employment status if a
volunteer is undertaking activities that were formerly performed by
employees or if the activities consist of general office work or
similar tasks which are an integral part of the school's core
functions.
While DOL guidance does permit some limited circumstances under
which volunteers may receive nominal compensation for mileage or
may be provided a free cafeteria lunch, for example, a commitment
to best practices dictates that volunteers should not be
compensated at all. Just as providing any compensation to
volunteers could convert them to employment status, a school's
exercising rigorous control over the activities of the volunteers
could similarly suggest an employment relationship. Schools should
consider whether their need for volunteers to follow a strict
schedule and to be largely controlled by school administration in
the performance of their volunteer services mandates
re-consideration of the volunteer relationship.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.