On March 14, 2019, the Acting Administrator of the Wage and Hour Division of the US Department of Labor issued an Opinion Letter holding that time spent outside of working hours on an a voluntary employer-sponsored community service program that could result in a bonus for employees does not count as hours worked under the Fair Labor Standards Act. WHD Opinion Letter FLSA 2019-2 (March 14, 2019).
The requestor’s client provides an optional community service program for its employees. Under the program, employees engage in certain volunteer activities that either the client sponsors or the employees themselves select. The client compensates employees for the time they spend on volunteer activities during working hours or while they are required to be on the client’s premises; however, many of the hours that these employees spend on volunteer activities are outside normal working hours.
At the end of the year, the client rewards the group of employees with the greatest community impact with a monetary award, and the winning group’s supervisor decides how to distribute the award among the employees. In making this decision, the supervisor may consider how many hours each employee volunteered. The client does not require employees to participate in the program or direct or control their participation. Finally, the client is considering using a mobile device application to track each participating employee’s volunteer hours.
The Acting Administrator began by observing that “the FLSA recognizes the generosity and public benefits of volunteering and allows people to freely volunteer time for religious, charitable, civic, humanitarian, or similar public services.” A person is ordinarily not an employee under the FLSA if the individual volunteers without contemplation or receipt of compensation. However, the volunteer must offer his or her services “freely without coercion or undue pressure,” direct or implied, from an employer.
According to the Acting Administrator, an employer may notify employees of volunteer activities and ask for assistance with them as long as there are “no ramifications if an employee chooses not to participate.” Moreover, “the practice of compensating employees when they participate in volunteer activities during normal working hours does not jeopardize their status as volunteers when they participate in volunteer activities outside of normal work hours.”
Additionally, the Acting Administrator confirmed that “an employer may use an employee’s time spent volunteering as a factor in calculating whether to pay the employee a bonus, without incurring an obligation to treat that time as hours worked, so long as:
- Volunteering is optional;
- Not volunteering will have no adverse effect on the employee’s working conditions or employment prospects; and
- The employee is not guaranteed a bonus for volunteering.
Based on the facts provided, the Acting Administrator confirmed that employee participation in the client’s program is charitable and voluntary. The client does not require participation in the program and does not control or direct volunteer work. It does not appear that the employees suffer adverse consequences in their working conditions or employment prospects if they do not participate in the volunteer activities—such as, for example, by receiving a monetary penalty or by being disqualified from participating in a bonus program. Moreover, the client does not guarantee participating employees a bonus for their volunteer work. Instead, the client only rewards the group with the most community impact and gives the winning group’s supervisor discretion to determine what amount of the bonus, if any, to award to individual employees in the group. As such, the Acting Administrator concluded that “participation in [the] client’s program does not count as hours worked under the FLSA, so long as [the] client does not unduly pressure its employees to participate.”
As a separate matter, the Acting Administrator concluded that a client may use a mobile device application to track a participating employee’s time spent volunteering to tally hours and determine which team’s volunteering has the greatest community impact. But if the client uses the application to direct or control the employee’s activities by, for example, giving specific instructions about what volunteer work he or she should do, or how he or she should do it, the time the employee spends following these instructions is hours worked under the FLSA.
This Opinion Letter has the effect of encouraging employers to offer employees voluntary community service programs outside of working hours without the fear of being required to pay for the volunteer work. It should be noted, however, that the Opinion Letter only addresses the compensability of such volunteer time under the FLSA – state law may differ.