By Daniel L. Schwartz and Jaclyn K. Leung
All employers, including nonprofit organizations, need to know
when their employees can and cannot provide unpaid volunteer
services to the organization. If an employer mistakenly accepts or
receives "volunteer" services under the wrong
circumstances, it could risk liability for a variety of claims
arising under wage, tax, unemployment compensation and workers'
compensation laws.
Under the Fair Labor Standards Act (FLSA), individuals who provide
services without any expectation of compensation are
"volunteers." In enforcing the FLSA, the United States
Department of Labor (DOL) considers several factors to determine
whether an individual is an employee or a volunteer. Such factors
include but are not limited to whether (1) the designation of
"volunteer" status is done unilaterally by the employer
to avoid minimum wage or overtime requirements; (2) the volunteer
time is for a civic, charitable or humanitarian purpose without any
promise, expectation or receipt of compensation by the employee;
and (3) the act of volunteering is truly voluntary, without any
direct or implied coercion from the employer.
The DOL has provided some guidance as to when an employee of a
nonprofit organization may volunteer at the same organization where
he or she is employed. Specifically, the DOL has taken the position
that employees may not volunteer to provide services for the
nonprofit organization that are "the same as, similar, or
related to" their regular job duties. As a general example, a
school custodian may not volunteer to empty the trash cans after a
basketball game, but he or she may volunteer to coach the team. The
DOL also has stated nonprofit organizations cannot request or
direct employees to perform volunteer work during the
employee's normal working hours, even if the requested
volunteer duties are not the same as or similar to the
employee's regular job duties.
In addition, nonprofit organizations must exercise caution with
respect to the type of perks or rewards given to volunteers for
their services. While volunteers may be provided with nominal and
occasional perks and rewards for their services (such as snacks or
certificates), actual payments in the form of stipends and/or
products of meaningful monetary value may be interpreted by the DOL
as compensation for services, which may cause a putative volunteer
to be classified as an employee. Determining when an employee may
provide volunteer services is a fact-specific inquiry, and if in
doubt, employers should consult legal counsel.
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.