If you’re a nonprofit
organization or public agency, you may have encountered the question of whether
your employees can also work in a volunteer capacity for you. Wage and hour
rules do permit employees to donate their time to their nonprofit or government
employers, but with some strict limits. We’ll review two recent opinion letters
on this topic from the U.S. Department of Labor (DOL). If you’re a
private-sector employer, note that neither state nor federal law permits employees
to volunteer on behalf of the for-profit businesses they work for.
The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.
Limits on Public Agency
Employee-Volunteers
The first opinion letter
involved a public school district where nonexempt, nonteaching staff, such as custodians
and secretaries, volunteered for the school’s sports teams as coaches or
advisors. The issue was whether the Fair Labor Standards Act (FLSA), which is
the federal wage and hour law, permits employers to pay these individuals a
small stipend for their volunteer efforts.
The DOL explained that
under FLSA regulations, the term “employee” doesn’t include someone who volunteers
for a public agency if all of the following terms are met:
1. The volunteer isn’t otherwise
employed by the same public agency to perform the same type of services as
those for which he or she is volunteering. For example, a school secretary
couldn’t donate clerical work to a school fundraiser for no pay, but could volunteer
to chaperone a school dance.
2. The volunteer offers
the services freely and without pressure or coercion from the employer.
3. The volunteer
performs the volunteer work for civic, charitable, or humanitarian reasons,
without any expectation of compensation for those services. Although volunteers
can’t receive compensation, they can be paid expenses, reasonable benefits, or
a nominal fee. However, if these payments are tied to productivity, they will
be viewed as compensation and the person will lose volunteer status. If this is
the case, the individual would have to be treated as an employee for purposes
of these “volunteer hours,” meaning all wage and hour rules, including minimum
wage and overtime requirements, would apply.
With respect to the
coaching stipend paid by the school, the DOL explained that a volunteer stipend
or fee will be presumed to be nominal if it doesn’t exceed 20 percent of what
the public agency otherwise would pay to hire an employee to perform the same
service.
Nonprofit Volunteers
The rules concerning
volunteers for religious, charitable, or similar nonprofits are much the same,
the second recent opinion letter indicated. The opinion addressed whether time spent
volunteering at an annual run hosted by a nonprofit university amounted to
“hours worked” for exempt and nonexempt university employees. The university
asked employees to volunteer to help out with such duties as course marshalling
and water distribution, but there were no ramifications if employees declined.
The DOL explained that
the employer must compensate employees for hours spent volunteering during
their normal working hours or when the volunteer work performed is similar to their
regular duties. Thus, said the DOL, employees who volunteered at the race after
normal work hours to perform race duties not similar to their regular duties
didn’t have to be compensated for those hours.
have to pay employees who volunteer their time to your organization. The labor
commissioner takes the position that a regular employee of a religious,
charitable, or nonprofit may donate services as a volunteer as long as they
aren’t the usual services of that employee’s job. But there’s an important
limitation: When religious, charitable, or nonprofit organizations operate
commercial enterprises serving the general public— such as a thrift shop—or
contract to provide personal services to businesses, employees, even those who wish
to volunteer, must be paid for their time. Note that public agencies are only
subject to federal rules governing employee-volunteers.