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by Mike Bishop J.D.

Dear Rita:

We operate a nonprofit housing clinic for homeless persons. The pandemic, along with the holidays, has inspired some of our employees to inquire about doing extra work for us as volunteers. We don’t normally use volunteers. However, we appreciate the offers of help from our staff and could certainly use the extra help this time of year.

What are the rules and the risks if we want to allow our employees to volunteer for us? We know, for example, that volunteers cannot be paid for the services they provide.

Thanks,

Appreciative

Dear Appreciative:

Many nonprofits regularly use volunteers to carry out their mission as a way of economically supplementing the work of their employees. Both categories of workers provide invaluable service to the nonprofit. However, it is important to remember that while employees are paid and also protected by most employment laws, volunteers are not.

It is also important to keep in mind the differences between these two categories of workers to ensure that the volunteers, who you will not pay, are properly classified. Regrettably, volunteers are often used and treated as employees (such as by being paid approximate to the compensation for the work they do; performing work in activities that are “commercial in nature”; or displacing employees), and this can create the potential for significant wage and hour claims against the nonprofit.

The Basics to Know

Under the Fair Labor and Standards Act (FLSA), nonprofits can use volunteers to perform services of a “religious, charitable, civic, humanitarian, or similar character.” A volunteer is defined as an “individual who performs hours of service for civic, charitable, or humanitarian reasons, without promise, expectation or receipt of compensation for services rendered.” But it is important to understand that volunteers cannot do work that displaces employees and they cannot do work that other employees regularly do. In other words, volunteer work cannot supplant regular employee work in any way. An example of this situation is when you use a volunteer to provide fundraising or other such “charitable” services; however, if you use a volunteer to work at a reception desk during a regular workday, and which would be typically performed by an employee, the volunteer status might be compromised.

Another thing to keep in mind is that, in keeping with the nature of the work volunteers are permitted to do, you cannot use volunteers to work in commercial enterprises.  However, a nonprofit can engage in commercial activities. A domestic violence shelter that operates a coffee shop or café, for example, is engaging in a commercial activity, as is an environmental education organization that operates a bookstore. Volunteers could not be used in that coffee shop or that bookstore.

Whenever the work is commercial in purpose and operation, you must instead use employees. The Department of Labor has determined that unpaid volunteers cannot perform services in these enterprises. The workers in these enterprises must be paid employees.

 

The Considerations That Permit Employees to Volunteer

The Department of Labor accepts that, given the right conditions, employees of a nonprofit can reasonably provide volunteer services for their employer. Before you permit an employee to leave the employment sector and enter instead into the volunteer zone, however, analyze these conditions carefully to ensure that you are correctly creating a true volunteer.

Make sure the employee is freely volunteering.

There should be no compulsion or pressure, either express or implied, placed on the employee to work for free as way to keep their paid job. The desire of the employee to volunteer should be completely voluntary, arising from purely charitable motives.

Do not provide any compensation to the employee for the volunteer work.

While a nominal gift or other small form of recognition of the service an employee provides as a volunteer is generally appropriate and usually not a risk, paying the employee anything that appears to be compensation for the services provided crosses the line. Any such payment can be used by state and federal regulators to rule that the volunteer designation is not valid.

Under no circumstances should you allow an employee to volunteer to do work that is a part of their regular employment duties.

This principle is the most critical factor for a current employee to successfully volunteer. Follow it without exception or compromise. Among the examples set out by the Department of Labor is that of a nonprofit school custodian. A person employed as a custodian may not volunteer to empty the trash cans after a basketball game, as that task is part of their ordinary work duties. They may, however, volunteer to coach the team.

As a corollary to this rule, the Department of Labor is clear that the volunteered services of a current nonprofit employee cannot be performed during the employee’s regular hours or schedule of work. Those volunteer hours must be scheduled outside of the nonprofit employee’s regular workday.

An employee’s desire to serve as a volunteer to advance their nonprofit employer’s mission is admirable and should be properly recognized. However, there is serious risk in accepting this service without caution and attention to the rules the Department of Labor and other agencies have created.

The purpose of these rules is to ensure that the employer does not take undue advantage of the employee’s generosity, abusing that employee’s employment rights in the process. From the nonprofit’s perspective, it’s important to acknowledge and appreciate an employee’s well-motivated generosity, and working with such employees as volunteers can create stronger bonds of good will. But enjoying the advantages of such generosity, freely given, is one thing. Taking advantage of an employee is another. Following these guidelines protects both nonprofits and employees, helping to ensure sound and healthy and mutually advantageous working conditions.

 

Author: Mike Bishop is a member of the State Bar of California and has been admitted to practice in a number of federal district courts in both California and Ohio.