Cecily Zamora
Volunteers are essential to the success of many nonprofits, but understanding how labor laws apply to them can be tricky. The Fair Labor Standards Act (FLSA) defines a volunteer as someone who freely provides services without expecting compensation for public service, religious, or humanitarian objectives. Nonprofits must be cautious with the perks they provide to volunteers, as anything of meaningful monetary value could cause them to be classified as employees. While employees can volunteer, nonprofits must ensure they are not pressured to do so and that they are not performing the same tasks they are employed to do. Nonprofits should consult their state's labor office and seek legal advice to ensure they are compliant with volunteer labor laws and protect the rights of their volunteers and those they serve.
| Characteristics | Values |
|---|---|
| Definition of a volunteer | The US Department of Labor defines a volunteer as someone who gives their time and effort without expecting payment in return. |
| Volunteer labor laws | The Fair Labor Standards Act (FLSA) outlines volunteer labor laws. |
| Volunteer work in public sector agencies | Individuals are allowed to volunteer their services to public agencies and their community. |
| Volunteer work in the private sector | Employees may not perform voluntary work for any private-sector firm that is subject to the FLSA. |
| Nonprofit organizations and the FLSA | The FLSA applies to non-profit organizations that engage in ordinary commercial activities that result in sales made or business done. |
| Volunteer management | Nonprofit organizations must have effective volunteer managers who recruit and manage volunteers in accordance with labor laws and regulations. |
| Volunteer compensation | Nominal perks and rewards (e.g. snacks or certificates) can be provided to volunteers without being considered compensation. Actual payments, stipends, or gifts with meaningful monetary value may classify volunteers as employees. |
| Specialized volunteer roles | Roles requiring counseling or medical certifications have different licensure requirements based on the volunteer role and organization policies. |
| Employee volunteering | Employees of nonprofit organizations can also volunteer, but specific rules must be followed to avoid legal risks, wage and hour claims, and violations of minimum wage and overtime requirements. |
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What You'll Learn
Volunteers vs. employees
Volunteers and employees both contribute to the success of a nonprofit organization, but it is important to distinguish between the two to avoid legal repercussions. The Fair Labor Standards Act (FLSA) defines "employ" as "to suffer or permit to work", meaning that employees are workers who perform services for an employer, and the employer controls how and what the employee will do. Employees are typically paid at least minimum wage and receive overtime for any hours over 40 in a workweek unless exempt under federal law.
Volunteers, on the other hand, donate their time and energy without receiving financial or material gain. They are not considered employees if they freely volunteer for public service, religious, or humanitarian objectives without the expectation or receipt of compensation. Volunteers typically serve on a part-time basis and do not displace regular employees or perform the same type of work that paid employees do. Nonprofit organizations should have volunteer handbooks or agreements that emphasize volunteer status and make it clear that no compensation will be provided.
It is important to note that paid employees of a nonprofit organization cannot volunteer to provide the same type of services they are employed to perform. Additionally, public employers must ensure that any employee offering unpaid volunteer work has not been compelled to do so by any agency official. Nonprofits that engage both volunteers and employees should have written job descriptions for each paid role and position descriptions for volunteer roles to ensure compliance with labor laws and avoid unknowingly breaking the law.
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The Fair Labor Standards Act (FLSA)
The FLSA defines employment very broadly, as "to suffer or permit to work". However, the Supreme Court has clarified that the FLSA was not intended to classify all individuals working on the premises of another entity as employees, particularly if they are doing so for their own advantage and without any express or implied compensation agreement. The Department of Labor follows this guidance in the case of individuals serving as unpaid volunteers in various community services. These volunteers are not considered employees of the non-profit organisations that receive their services.
A volunteer is generally not considered an employee for FLSA purposes if they are volunteering freely for public service, religious or humanitarian objectives, and without contemplation or receipt of compensation. Such volunteers typically serve on a part-time basis and do not displace regular employees or perform work that would otherwise be done by regular employees. Additionally, paid employees of a non-profit organisation cannot volunteer to provide the same type of services they are employed to provide.
The FLSA outlines specific provisions for record-keeping, requiring employers to display an official poster outlining the requirements of the FLSA, as well as maintain employee time and pay records. The act also includes protections for minors, prohibiting their employment in jobs or under conditions detrimental to their health, well-being, or educational opportunities.
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Volunteer recruitment
Volunteers are crucial to the success of nonprofits, offering their time and skills for free and helping to further the nonprofit's mission. As such, volunteer recruitment is an important process for any nonprofit.
Firstly, it is important to understand the basics of volunteer recruitment and the legal distinction between volunteers and employees. Under the Fair Labor Standards Act (FLSA), volunteers are not considered employees if they are serving without any express or implied compensation agreement, and are offering their services for public service, religious or humanitarian objectives. Non-profit charitable organizations are not covered by the FLSA unless they engage in commercial activities. Therefore, it is important for volunteer managers to understand labor laws to ensure compliance and avoid unknowingly breaking the law.
When it comes to recruiting volunteers, there are several strategies that can be employed. One is to utilize a volunteer-matching platform, such as VolunteerMatch, which is the largest network in the nonprofit world, with over 13 million volunteers. Such platforms can help connect nonprofits with highly qualified and passionate volunteers quickly and effectively.
Another strategy is to create a volunteer recruitment plan. This involves evaluating the current state of volunteer involvement in the nonprofit and determining how to attract more volunteers. The plan should include engaging elements, such as opportunities to connect with staff and other volunteers, and highlight what sets the volunteer program apart from others. Nonprofits can also encourage their most dedicated volunteers to reach out to friends and family or invite them to bring someone along to their shift, offering incentives like free merchandise or social media recognition.
By optimizing volunteer recruitment efforts, nonprofits can build a strong volunteer base, which will ultimately contribute to the long-term success of the organization.
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Volunteer rights and protections
Volunteers are generally not considered employees under the Fair Labor Standards Act (FLSA) if they are freely volunteering for public service, religious or humanitarian objectives, and without contemplation or receipt of compensation. Volunteers are defined as those who give their time and effort without expecting payment in return. Volunteering is distinct from employment, where the latter implies an express or implied compensation agreement.
Volunteers are protected under the Federal Volunteer Protection Act of 1997, which provides immunity for volunteers for harm caused by their acts or omissions, but only under certain circumstances. These include:
- The volunteer was acting within the scope of their responsibilities.
- The volunteer was properly licensed, certified, or authorized to act.
- The harm was not caused by willful, criminal, or reckless misconduct, gross negligence, or conscious, flagrant indifference to the rights or safety of others.
- The harm was not caused by the volunteer operating a motor vehicle, vessel, or aircraft for which a license and insurance are required.
It is important to note that the Volunteer Protection Act does not mean that volunteers are immune from being sued. Plaintiffs' lawyers may still sue volunteers by alleging gross negligence, flagrant indifference, or acts outside the scope of their responsibilities. Additionally, the Act does not eliminate the liability of the organization itself for the acts or omissions of its volunteer agents.
Federal child labor laws do not apply to volunteers, but organizations should be aware of state regulations regarding the involvement of youth volunteers. State parental consent laws may also impact the participation of minors in volunteer activities.
Volunteers have the right to be treated with dignity and compassion, valued for their contributions, and involved in decisions that affect them. Organizations should encourage inclusivity, protect the privacy of volunteers, and uphold professionalism in all interactions.
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Tax liabilities
Nonprofits should be cautious about the type of perks or rewards they give to volunteers for their services. While volunteers may be provided with perks and rewards of nominal and occasional value, such as snacks or certificates of achievement, actual payments in the form of stipends, gift cards, or products of meaningful monetary value may be interpreted by the Department of Labor and the Internal Revenue Service as compensation for services. This may cause a volunteer to be classified as an employee, potentially leading to legal issues.
According to the Fair Labor Standards Act (FLSA), a volunteer generally will not be considered an employee if they freely offer their services for public service, religious, or humanitarian objectives without expecting or receiving compensation. Volunteers typically serve on a part-time basis and do not replace or perform the same work as regular employees. The FLSA sets minimum wage, overtime, record-keeping, and child labor standards, and it applies to employees of businesses with an annual gross volume of sales or business done of at least $500,000. Non-profit charitable organizations are not covered by the FLSA unless they engage in commercial activities that result in sales or business, such as operating a gift shop.
Most volunteers at nonprofits qualify as employees for tax purposes because they work under someone else's supervision or direction. As such, they can receive tax-free fringe benefits, just like employees. For example, volunteers can purchase goods or services from the nonprofit at a discounted price, typically up to 20% off the price offered to the general public. Additionally, volunteers can deduct certain expenses incurred while volunteering, such as away-from-home travel expenses, vehicle costs, and the cost of required uniforms with no general utility. These deductions must be supported by documentation from the charity for amounts of $250 or more.
Nonprofits can offer certain tax-free benefits to volunteers, such as providing the same services the organization offers to the public for free, as long as it does not impose a substantial cost. For example, a volunteer at a nonprofit health clinic may obtain free health care if it does not incur a substantial additional cost. Additionally, expenses for education that maintains or improves job skills or is required by the nonprofit are tax-free benefits. Volunteer-employees may also be provided with tax-free health and accident insurance and limited group life insurance coverage. While there are no tax issues with rewards of nominal value, more substantial rewards, such as money or valuable gifts, would be considered taxable income for the volunteer.
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Frequently asked questions
The FLSA is a federal law that sets minimum wage, overtime, recordkeeping, and child labor standards. The act defines employment as "to suffer or permit to work". Volunteers are not considered employees under the FLSA if they are serving without any expectation of compensation for public service, religious, or humanitarian objectives. Non-profit charitable organizations are not covered by the FLSA unless they engage in commercial activities that result in sales.
There are legal risks involved in allowing employees of a nonprofit to volunteer for their employer. The FLSA enforces rules that limit the potential manipulation or abuse of minimum wage and overtime requirements. Nonprofits must ensure that employees are not pressured to volunteer and that they are not performing the same tasks as their regular employment. Violating these rules can result in lawsuits and monetary consequences.
Volunteers can contribute to nonprofits in various ways, such as driving vehicles, folding bandages, working with children, helping in youth programs, providing childcare assistance, soliciting contributions, and participating in benefit programs.
Nonprofits should be cautious with the type of perks or rewards given to volunteers as actual payments or items of monetary value may cause a volunteer to be classified as an employee. Nonprofits should also be aware of federal child labor laws and ensure compliance with the Fair Credit Reporting Act (FCRA) when conducting volunteer background checks. Additionally, nonprofits should understand their legal rights and duties to ensure compliance with labor laws and avoid unknowingly breaking the law.
