In our last post, we looked at the rules governing volunteers at for-profit entities. As we discussed, for-profit organizations have almost no latitude to accept volunteer services. However, nonprofit employers face a more relaxed regulatory scheme under the FLSA when it comes to volunteers. Unlike their for-profit brethren, nonprofit employers can accept volunteer services without running afoul of the FLSA’s minimum wage and overtime requirements. The FLSA regulations contain an exception for individuals who undertake volunteer activities for their own “personal, civic, charitable, humanitarian, religious, or public service reasons.”
To this end, the DOL has recognized that “ordinary volunteerism” to religious, charitable, and nonprofit organizations and schools does not create an employment relationship. Truly volunteer services come without the expectation of compensation in cash or in-kind benefits and are given freely without coercion. In addition to ensuring that individuals are truly volunteering, the DOL and federal courts look to:
- The nature of the entity receiving the services
- The character of the services themselves
- The amount of control the employer exerts over the volunteer
- Compensation or benefits provided to the individual, or that the individual expects
- Whether the volunteer work displaces paid work by regular employees
The first factor examines what the volunteers do. For instance, “volunteers” who operate a nonprofit’s business selling goods or services to the public, such as a resale shop or a restaurant may not qualify as volunteers because of their direct participation in commerce. The DOL and courts are more likely to find individuals in a non-sales role, such as docents providing information at a nonprofit hospital or servers passing out free food at a homeless shelter, to be volunteers.
For the same reason, a person who already performs the same or related services for a nonprofit on apaid basis cannot perform those services on a volunteer basis at any time, whether during or outside regular working hours. Similarly, a person who receives significant gifts or monetary stipends to perform work (even if less than minimum wage) is more likely to be an employee than a volunteer.
Just as with independent contractors, the third factor looks to the amount of control an employer exerts over a volunteer. A nonprofit that gives a worker a part-time schedule with no set hours can more easily establish that the person is a volunteer, all other things being equal. The DOL and courts are more likely to find a nonprofit that gives a “volunteer” regularly scheduled, full-time hours or that requires “volunteers” to get approval to change or miss shifts has employees, not volunteers. In general, the DOL’s past FLSA decisions have held that the more restrictions nonprofit employers put on volunteers, the more likely those employees would be deemed employees.
The flipside of restrictions is benefits, and both of the last two factors work the way you would expect. First, nonprofit volunteers should be just that—volunteers of their time without payment. Nonprofits that pay employees regular and significant amounts, whether described as wages, barters, stipends, allowances or something else make volunteers look more like employees, even if the payments amount to less than minimum wage.
Finally, a paid employee can never provide the same or similar services to a nonprofit as a volunteer, regardless of whether the “volunteer” services come during regular working hours or outside of them. Similarly, a “volunteer” cannot provide the same or similar services to your nonprofit organization as your regular employees do: those volunteers are simply employees.
As we said in our last post, no single factor is determinative here. The unique facts of your situation weighed against the factors above will determine the outcome. Whenever you consider taking on a volunteer, consider all of the circumstances before accepting their services and get some good wage and hour legal advice first!