Some organizations benefit from the added help of volunteers, particularly during special campaigns such as fundraising drives or charitable community events. The volunteers also enjoy the spirit of giving and investing in the community. However, under some circumstances, volunteers can be regarded as “employees” who must be paid wages for their time. This situation may trigger liability for both, the organization enjoying the benefits of “free labor” and the individual donating their time.
The Florida Minimum Wage Act and the federal Fair Labor Standards Act (FLSA), require employers to pay covered employees[1] for all “hours worked.”[2] Subject to some limitations, individuals who volunteer or donate their time to public agencies and nonprofit organizations are not considered employees of the organization and do not need to be paid for their work. This excludes employees of for-profit organizations, who cannot “volunteer” work for their organizations without lawful compensation.
Public Agency Volunteer
Under the FLSA regulations, a volunteer of a public agency is someone who “performs hours of service for a public agency for civic, charitable, or humanitarian reasons, without promise, expectation or receipt of compensation for services rendered.”
“Public Agency” is defined by the FLSA to mean the U.S. Government, the government of a State (or political subdivision of it), any agency of the United States, a State (or a political subdivision of a State), or any interstate governmental agency. It does not include private companies engaged in work activities normally performed by public employees.
While individuals can volunteer services for any public agency employer without compensation, employees of a public agency cannot donate their services to a public agency unless they volunteer to do different work than that for which they are employed. For example, if the employee is a bookkeeper, he or she may not volunteer bookkeeping services for a public agency without due compensation.
In addition, the public agency employer cannot exert undue pressure on its employees to compel them to volunteer.
Nonprofit Volunteer
Under the FLSA, an individual who donates time serving a nonprofit organization for civic or humanitarian reasons is a volunteer and not an employee, as long as (a) the individual is not an employee of the nonprofit organization for which he or she volunteers, (b) does not receive or is promised compensation for the services provided, and (c) the volunteer’s work is less than full-time and does not displace an employee of the organization.
A “nonprofit organization” is exempt from tax as a charity under Section 501(c)(3) of the federal Internal Revenue Code, or “any not-for-profit organization which is organized and conducted for public benefit and operated primarily for charitable, civic, educational, religious, welfare, or health purposes.”
As with public agency employees, the FLSA restricts employees of a nonprofit organization from donating services that are the same as, similar, or related to their regular job duties in their employer organization. Also, nonprofit organizations cannot request or direct employees to perform volunteer work during the employee’s normal working hours, even if the requested duties are not the same as or similar to the employee’s regular job duties.
Private Sector Volunteer
Under the FLSA, employees of a for-profit organization may not volunteer their services to a for-profit or private sector employer. Labeling an employee as a “volunteer” does not discharge the employer’s obligation under the FLSA to compensate the employee if his or her work benefits the for-profit organization.
Limitation of Volunteer Liability
Subject to some exceptions, the federal Volunteer Protection Act (US VPA) and the Florida Volunteer Protection Act (FL VPA) limit and sometimes eliminate a volunteer’s risk of tort or civil liability for harm caused by their acts or omissions on behalf of the nonprofit organization or government entity. This protection does not apply to negligent, reckless, willful, or criminal acts, among other conduct.
Compensation
Employers who wish to provide volunteers with monetary or in-kind benefits must exercise caution that these actions are not considered compensation subject to taxation, or that the benefit does not jeopardize the volunteers’ status. For example, reimbursement for expenses, uniforms, and nominal fees, or a combination of these, are not considered compensation. Similarly, t-shirts, mugs, and souvenirs, are likely not considered compensation. However, reimbursements for ordinary living expenses like groceries, clothing (other than uniforms), and commuting to and from home are likely to be considered taxable income.
Under the FL VPA, “compensation” does not include a stipend (as provided by the Domestic Service Volunteer Act) or other financial assistance, valued at less than two-thirds of the federal hourly minimum wage standard, paid to a person who would otherwise be financially unable to provide the volunteer service.
However, under the US VPA, if the volunteer receives value in lieu of compensation in excess of $500 per year, they will lose their volunteer liability protection under the Act.
Unpaid Interns in the Public or Nonprofit Sectors
An unpaid intern for a nonprofit or public sector organization is considered a volunteer. The FLSA recognizes the benefits of volunteering for nonprofit or public entities, and such unpaid interns or volunteers will ordinarily not be considered employees under the FLSA if they volunteer freely without contemplation or receipt of compensation. However, there are some situations where unpaid interns may be regarded as employees, triggering wage and hour liability. [3]
Best practices
Liability for employer non-compliance with wage and hour laws could be onerous.[4] It is important that employers and volunteers alike understand the legal classification of volunteers under the law. Employers should consult knowledgeable employment counsel when developing and implementing their volunteer programs and policies. In addition, unpaid volunteers must be aware of the impact of receiving in kind benefits, payments, and reimbursements on their volunteer status, as this may trigger tax liability and may remove any civil liability shield under the volunteer protection federal and state laws.
Whether you are an employer, employee, or independent contractor, the Orlando employment law attorneys of Burruezo & Burruezo can assist you in assessing a volunteer situation and offer competent legal representation, if necessary. Click here to contact an attorney now.
[1] For more information on employee coverage, see: FLSA Enterprise and Individual Coverage, Exempt or Non-Exempt? Employee Classification Under FLSA, Overtime Pay, and Minimum Wage blog articles.
[2] See Hours Worked blog article for more information.
[3] See Interns and Trainees blog article for additional information on this subject.
[4] See Wage and Hour Claims, Minimum Wage and Overtime Pay blog articles for additional information.