Part 1: Legal Issues with Volunteers

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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 can be freewheeling in 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.”¹ Volunteers or interns in the for-profit setting are tricker 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.”² 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.”³

Organizations can violate the employee-volunteer distinction in various ways. First, organizations might pay individuals “under the table” or provide them non-monetary compensation or benefits as a quid-pro-quo for their services. Once this happens, the worker has an expectation of compensation, is not longer providing their services freely, and is likely an employee rather than a volunteer.

Second, nonprofit organizations cannot use volunteers in inherently commercial activities. Organizations 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.

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.

When Volunteers Get Fired—EEO Laws

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, 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 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. The majority of federal courts require a person to receive remuneration in order to be an employee for purposes of federal EEO laws.⁴ But some federal courts apply 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.⁵ State and local EEO laws also vary considerably on whether volunteers can be “employees” and have standing to sue for employment discrimination.

Conclusion

This should help to clarify the status of volunteers. Watch for a second post that covers some of the issues that may arise for volunteers.

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¹ See U.S. Department of Labor, Wage and Hour Division, Fact Sheet #14A: Non-Profit Organizations and the Fair Labor Standards Act (FLSA), (August 2015).

² Id.

³ Id.

⁴ See, e.g., Sacchi v. IHC Health Servs., Inc., 918 F.3d 1155, 1158 (10th Cir. 2019) (“Unless a student receives remuneration for the work he performs, he is not considered an employee”).

⁵ See, e.g., Marie v. Am. Red Cross, 771 F.3d 344 (6th Cir. 2014) (“Remuneration . . . is a nondispositive factor that should be assessed in conjunction with the other applicable factors to determine if a volunteer is an employee”).

Featured Image by Rebecca Sidebotham.