Employment Status: Volunteer or Employee?
Posted by Nancy Mullin on Fri, Apr 15, 2011
If your company accepts the services of people who donate or volunteer their time, you may be wondering if you are obligated to pay those individuals for their services. In fact, there are situations in which a person who volunteers his or her services may result in an employment relationship that entitles that person to certain minimum wage and other protections. The following guidelines provided by the U.S. Department of Labor (DOL) can help you decide whether such workers are volunteers or employees and ensure that your company is paying wages in accordance with Federal law.
The Federal Fair Labor Standards Act
The Fair Labor Standards Act (FLSA), which prescribes standards for the basic minimum wage and overtime pay, affects most private and public employment. Unless specifically exempted, workers covered by the FLSA are entitled to a minimum wage of not less than $7.25 per hour and overtime pay at a rate of not less than one and one-half times their regular rate of pay after 40 hours of work in a workweek.
Employment Relationship
In order for the FLSA to apply, there must be an employment relationship between an "employer" and an "employee." Factors such as the place where the work is performed, the absence of a formal employment agreement, the time or method of payment and whether an individual is licensed by the state or local government have no bearing on whether an individual is an employee under the FLSA.
Volunteers
According to the DOL's FLSA Advisor, the FLSA defines employment very broadly as "to suffer or permit to work." However, the Supreme Court has made clear that the FLSA was not intended "to stamp all persons as employees who without any express or implied compensation agreement might work for their own advantage on the premises of another." In administering the FLSA, the DOL follows this judicial guidance in the case of individuals serving as unpaid volunteers in various community services. So, individuals who volunteer or donate their services, usually on a part-time basis, for public service, religious or humanitarian objectives, not as employees and without contemplation of pay, are not considered employees of the religious, charitable or similar non-profit organizations that receive their services.
For example, parents may assist in a school library or cafeteria as a public duty to maintain effective services for their children, or they may volunteer to drive a school bus to carry a football team or school band on a trip. Similarly, an individual may volunteer to perform such tasks as working with disabled children or disadvantaged youth.
Under the FLSA, employees may not volunteer services to for-profit private sector employers. On the other hand, in the vast majority of circumstances, individuals can volunteer services to public sector employers. Congress has made clear that people are allowed to volunteer their services to public agencies and their communities with one exception… public sector employers generally may not allow their employees to volunteer, without compensation, additional time to do the same work for which they are employed. It is important to also consider all the facts and circumstances in a particular case, including whether the volunteer service is closely related to the actual duties performed by, or responsibilities assigned to, the employee. There is no prohibition on anyone employed in the private sector from volunteering in any capacity or line of work in the public sector.
It is very important to properly classify those individuals who perform services for your company as employees or volunteers. Also, keep in mind that some employees may be exempt from various provisions of the FLSA. For help in determining the employment status of your workers, please review the FLSA Coverage and Employment Status Advisor and contact the DOL's Wage and Hour Division at 1-866-487-9243.