The Cost of Free Help: Legal Issues with Volunteers

Non-profit organizations often enlist the services of volunteers to carry out activities. After all, it’s much cheaper. Also, volunteers are easier to manage from an administrative perspective. Many laws and regulations apply only to employees, such as anti-discrimination laws, wage and hour regulations, workers' compensation, unemployment insurance, tax withholdings, family and medical leave, and others. 

Though government is more hands-off with respect to an organization’s relationship with volunteers, that does not mean that non-profits have no restrictions on how they use and manage volunteers. This article discusses some legal issues that can arise with respect to the use of volunteers and how non-profit organizations can navigate those issues to avoid liability.

When Volunteers Get Paid—Wage and Hour Laws

Entities that can easily use volunteers include “religious, charitable, civic, humanitarian, or similar non-profit organizations.” Volunteers or interns in the for-profit setting are trickier to handle. 

But even non-profits can miscategorize workers by treating them as volunteers when they are actually employees who must be compensated. State and federal laws regulating minimum wage and overtime requirements define “employee” very broadly and define “volunteer” very narrowly. The U.S. Department of Labor has explained that a worker will be considered a volunteer (not an employee) only “if the individual volunteers freely for public service, religious or humanitarian objectives, and without contemplation or receipt of compensation.” The DOL also advises that volunteers typically “serve on a part-time basis and do not displace regular employed workers or perform work that would otherwise be performed by regular employees.”  

Organizations can violate the employee-volunteer distinction in various ways. First, organizations might pay individuals “under the table” or provide them with non-monetary compensation or benefits as a quid-pro-quo for their services. Once this happens, the worker has an expectation of compensation, is no longer providing their services freely, and is likely an employee rather than a volunteer.  

Second, nonprofit organizations cannot use volunteers in inherently commercial activities. For example, they can use volunteers to perform service projects such as distributing food to the needy or cleaning up a park. But an organization that operates a gift shop could not use a volunteer as a cashier for that enterprise. This is a commercial activity, and that work will be considered employment that must be compensated. 

However, a fundraising event might be different. In a garage sale, where the money will be used directly for charitable purposes, it is not a commercial activity. 

Finally, paid employees of a non-profit organization cannot volunteer to provide the same type of services that they are employed to perform. For example, if Jim Janitor is paid to perform custodial services for a non-profit organization Monday through Friday, he cannot “volunteer” those same services on Saturday. He’s not volunteering: he’s working overtime—and he must be paid accordingly.

Reimbursing Volunteer Expenses  

What about reimbursing volunteer expenses? The rules are a little more flexible on reimbursing volunteers for their expenses in volunteering, such as gas mileage, meals, parking, or snacks. It's usually fine to reimburse for out-of-pocket costs, such as for travel or required attire. Reimbursements shouldn't be tied to productivity or to hours worked (like, "If we reach our fundraising goal, we're having a pizza party!") This makes it sound more like compensation. And there has to be a reasonable relationship to actual costs, not something like a monthly "stipend" with no real relationship to expenses. The reimbursement should also be nominal. If these rules are not followed, you might really have an employee. 

Assigning Work to Volunteers 

Volunteer labor is an unpredictable asset, since volunteers have their own jobs and lives. If you overuse volunteers, they may be overwhelmed or resentful. Consider these points. Is the task essential to the organization? It might be more reliable to assign it to a paid employee. Is the task time-sensitive? If so, consider if you can reliably deliver with your volunteer pool. If not, perhaps a paid staff member should handle it. Does the task require specific or extensive training? If so, consider how long it takes to train a particular volunteer as balanced with the benefit of the work. Consider using online training or training people in groups. Will the duties be recurring? Consider the overall, long-term load on your people. If you are barely getting by, you may need to use employees as well.

Volunteers and Discrimination 

The distinction between employees and volunteers is also important when it comes to liability under equal employment opportunity (EEO) laws that prohibit employment discrimination and retaliation. These laws make it illegal for an employer to hire, fire, or make other employment decisions on the basis of an employee’s protected status (e.g., race, sex, religion, disability, etc.) or protected conduct (e.g., requesting accommodation, opposing discrimination, etc.).  

Like wage and hour laws, in most states, EEO laws only apply to “employees” and generally do not apply to “volunteers” who are not employees. Therefore, if an organization decides to only select volunteers that adhere to the organization’s religious beliefs, or declines to accommodate a potential volunteer’s disability, this will typically not create liability for employment discrimination (although it might constitute public accommodations discrimination in some instances).  

However, unlike wage and hour laws, EEO laws do not always treat “volunteers” and “employees” as mutually exclusive categories. It is sometimes possible for a genuine volunteer to also be an “employee” for the purposes of EEO laws. This is because courts and jurisdictions are split as to whether compensation is a dispositive factor for determining whether an employment relationship exists. Most federal courts require a person to receive remuneration in order to be an employee for the purposes of federal EEO laws. But some federal courts use a multi-factor test for employment under which an individual could possibly be an employee even if the person did not receive remuneration but was still under the control and direction of the organization. State and local EEO laws also vary considerably on whether volunteers can be “employees” and have standing to sue for employment discrimination. Be sure to check your jurisdiction to determine a safe approach.

When Volunteers Get Hurt—Workplace Injuries

Another area of potential liability with respect to volunteers is for injuries. When employees get injured while in the course and scope of their employment, the laws of most U.S. states generally prevent them from suing their employers. Rather, employers are required to carry workers’ compensation insurance that provides a source of recovery when employees get hurt on the job. Employers get relieved of the risk of litigation from injured employees, and the employees get a more predictable and accessible form of compensation for workplace injuries.  

But this arrangement typically does not exist with respect to volunteers who get injured while in the course and scope of their volunteer activities. State law might not bar personal injury claims by volunteers against the organizations they serve, and workers’ compensation insurance policies may not provide coverage for such claims. In those scenarios, injured volunteers are likely to sue the nonprofits for whom they volunteer. 

Injured volunteers might sue to hold non-profits responsible for their injuries and to seek damages. These might include premises liability claims as well as claims based upon failure to warn of off-site dangers and failure to provide sufficient training to prevent injury. 

Coverage for Volunteers

In some cases, it is possible to include volunteers on your workers' compensation policy, and the policy would respond to a lawsuit by a volunteer in much the same way as if the suit were filed by a paid employee. This coverage is usually elective. 

Another alternative is to provide an accident policy for volunteers. Volunteer Accident Insurance would pay to treat volunteers injured on assignment or even traveling to and from volunteer duties. It could cover medical expenses, emergency treatment, even accidental death. These policies are generally no-fault and are often secondary to the volunteer's health insurance. Unlike workers' compensation, they don't cover lost wages or long-term disability. 

The organization can also have general liability insurance to cover unsafe premises or faulty equipment. This type of insurance protects the organization, not the volunteer. The organization may also have umbrella coverage. 

If volunteers are driving, an organization should have non-owned auto liability coverage, as secondary coverage to the volunteer's own personal auto insurance.

Training and Policies for Volunteers

If an organization uses volunteers regularly or extensively, it should have a Volunteer Handbook. This will contain some of the same policies as the Employee Handbook but also volunteer-specific policies and requirements. In particular, the Volunteer Handbook should include policies related to safety—such as all the child safeguarding requirements. 

Volunteers should be adequately supervised in their work by an employee or volunteer who has sufficient knowledge and training to supervise. 

Make sure volunteers have been adequately screened and background-checked, especially if they will be working with children or vulnerable people. 

In addition, volunteers should be adequately trained. Again, any volunteer working with children should be trained. Volunteers working in particular areas may need other training as well—anything from operating equipment to first-aid response. 

Volunteers should be aware of incident reporting procedures and have access to appropriate forms to provide proper notification of anything reportable. 

The organization should consider having volunteers sign a waiver of liability and acknowledge that they carry appropriate health insurance and auto insurance. 

When Volunteers Hurt Others—Vicarious and Direct Liability

Perhaps the biggest area of liability created by using volunteers is their capacity to hurt other people, either intentionally or inadvertently. One characteristic that volunteers share with paid employees is that both are agents of the organization they are serving. This means that the actions they take in the course and scope of their service will impute to the organization. In other words, if a volunteer hurts someone, the organization can be held vicariously liable.  

In addition to vicarious liability, the actions of volunteers can also create direct liability for organizations. This can include claims for negligent selection or screening of volunteers, negligent training, and failure to warn others of dangers that volunteers might create.  

To illustrate how both vicarious and direct liability might arise from the actions of volunteers, consider the following hypothetical: Vickie Volunteer donates her time to ACME Senior Services by picking up elderly individuals in ACME’s shuttle van and transporting them to various locations. One day, after picking up Ms. Peggy Passenger to take her to an appointment, Vickie ran a red light, struck Pat Pedestrian in the crosswalk, then veered off the road, hitting a telephone pole. Both Ms. Passenger and Mr. Pedestrian were injured. ACME had not properly screened Vickie before letting her drive its shuttle, and it did not know of Vickie’s bad driving record nor of her use of medications that impaired her response time. ACME had also neglected to list Vickie as a covered insured driver with its commercial auto policy. 

This oversight is not uncommon. Many organizations mistakenly assume that volunteers are automatically covered under their general liability or auto insurance policies, or by their own. While some general liability policies include volunteers, sharing the policy limits between the organization and its volunteers may result in the parties being underinsured for a serious claim. 

So, what kind of liability can ACME expect? Well, Ms. Passenger and Mr. Pedestrian are likely to assert vehicular negligence claims against ACME under a respondeat superior theory, since Vickie was acting in the course and scope of work for ACME when she injured them. They could also assert direct liability claims against ACME for negligent selection, training, and retention of Vickie, as well as against Vickie herself. 

Non-profits can also sometimes be implicated in the willful and intentional actions of their volunteers. This is especially true in the context of volunteers who work with children. For example, if a church youth group leader engages in sexual abuse of a minor and the church did not appropriately screen the volunteer or take steps to warn of any indications that the volunteer created known risks, then the church may be liable to the victims. 

Voluntary Vigilance: How Organizations Can Avoid Liability

While volunteers can be a valuable resource for non-profit organizations, they can also be a significant source of potential liability in each of the areas addressed above. Here is a non-exhaustive list of steps that organizations can take to help reduce the legal risks identified in this article and ensure that a volunteer’s free work does not become an expensive ordeal for both the organization and the volunteer:  

• Ensure that volunteers do not have expectations of compensation in any form for their services. 

• Make sure that expense reimbursements are reasonable and defensible. 

• Do not use volunteers to perform commercial activities or duties that are normally done by paid employees in the organization. 

• Avoid any practices that might be discriminatory when it comes to selecting or terminating volunteers and ensure compliance with any applicable EEO laws. 

• Thoroughly screen volunteers by using background checks, references, and in-person interviews, especially for volunteers who will work with vulnerable groups like children. Document the screening procedures so that they can be proved in litigation if necessary. 

• Properly train volunteers on how to perform their services in a way that is safe for them, the people they serve, and others. Proper training is particularly important if they work with children. Document this training so that it can be proved in litigation if necessary. 

• Provide a hazard-free workplace for volunteers and ensure that they have and use any appropriate protective equipment.  

• Volunteering is not a right; it’s a privilege. People who create risks to themselves or others should not be permitted to volunteer. 

• Ensure that volunteers are adequately supervised. 

• Ensure that volunteers have any necessary licensure to perform certain services (e.g., practicing medicine or operating commercial vehicles). If they are providing professional services, make sure their professional liability insurance covers the services. 

• Adopt written policies and procedures that address the various aspects of volunteering, including screening, training, supervising, and dismissal. 

• Implement written releases and waivers for volunteers to sign that explain the risks of their activities, waive rights to sue for injuries, and acknowledge their status as a volunteer. 

• Procure liability insurance that will cover injuries caused to or by volunteers with sufficient coverage limits. Consult with an insurance broker to make sure coverage is adequate and covers volunteers, perhaps as a separate policy. 

Non-profit organizations that want to manage risk can also consult with attorneys who are knowledgeable and experienced with nonprofit employment and volunteer issues. 

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Featured Image by Rebecca Sidebotham.