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Volunteer or Paid Employee: What’s the Difference?

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A question that often comes up, and has been addressed in many Opinion Letters by the federal Wage & Hour Division, is whether employees can “volunteer” to perform work for their employer without compensation. In almost every case, the answer is no.

While the law does recognize that individuals may choose to volunteer their time for civic or charitable organizations, the Wage & Hour Division (and the Supreme Court) have expressed concern over allowing an employee (even an employee of a nonprofit organization) to perform work without compensation. Specifically, the agency is concerned that an employee might be required to “volunteer” additional time without pay, which would violate the intent of the Fair Labor Standards Act.

One of the best summaries of this concern appeared in an Opinion Letter (FLSA 2001-18), which responded to a question about nurses volunteering their time for various community services. The response from the Division included the following:

“It has been determined, however, that employees subject to the Act may not choose to ‘decline’ the protections of the Act by performing activities for their employer that the employer and employees have characterized as ‘volunteer’ services.” (Tony and Susan Alamo Foundation, supra, at 302).

In that case, the Supreme Court was concerned that unless employees were barred on a general basis from ‘volunteering’ to perform any services for their employers there would be potential for the coercion of uncompensated services, to the detriment of the purposes of the Act. The Court did not wish to allow the prohibition against employees waiving their protections under the Act to be circumvented by characterizing work as ‘volunteer’ services, citing Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728 (1981) and Brooklyn Savings Bank v. O’Neil, 324 U.S. 697 (1945).

Accordingly, where employees of a nonprofit organization perform ‘volunteer’ work of the same type that constitutes their normal work activity, we have uniformly taken the position that the ‘volunteer’ work is compensable. This concern extends to both nonprofit and for-profit employers.”

In many cases, an employee cannot “volunteer” unpaid time to his or her employer. Volunteer activities are allowed if an individual is performing services for an organization and is not also an employee of that organization. However, once an employer/employee relationship exists, individuals cannot volunteer additional unpaid time for their employer unless a number of conditions are met.