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Offering benefits to nonprofit volunteers or employees can result in legal risks. While nonprofits want to find ways to reward and thank their volunteers for their work and support, it’s crucial that these gifts and benefits do not conflict with the law. Federal and state laws seek to protect workers by establishing employment standards that include wages and overtime based on work hours.
Moreover, these laws cannot be waived by any type of employer-employee agreement.
In most situations, nonprofit workers fall into four different categories of worker: employee, independent contractor, intern, or volunteer.
Employees
Workers are employees if they perform work for an organization and the organization controls the logistics of the project. The IRS determines when a person is an employee by three factors: if they receive a specific wage, have a contract, or their work is controlled by the organization.
Independent Contractors
These workers are independent of the hiring business that they do work for because they do business for themselves. The Department of Labor (DOL) measures workers by the standards outlined in the Fair Labor Standards Act (FLSA). Independent contractors are most easily recognized because they do a certain type of work according to a written contract that outlines the job and payment.
Interns
Interns are typically students who are receiving on-the-job training while also gaining educational credits. The DOL has a 6-factor test to decide what type of worker is an intern, and since interns are not covered by the FLSA, they can be paid. However, check your state law on interns because your nonprofit must comply with federal and state laws.
Volunteers
The DOL allows people to volunteer time to charitable, humanitarian, religious, or similar nonprofit organizations without being considered an employee. This volunteer work must be done without compensation or even an expectation of compensation. Volunteers also do not displace any genuine employees. Nonprofits, such as thrift stores, must classify all workers as employees. However, volunteers can be reimbursed for expenses such as mileage, protective clothing, or other associated costs.
Volunteer Rules of Thumb
No need to follow a consistent, full-time scheduleVolunteer “as needed” throughout the yearWork on various programs and activitiesNot responsible for the same types of work as a paid employeeNote: FLSA prohibits employees from “volunteering” to do their work tasks since this would be waiving their rights under the law.
Manage Legal Risks of Offering Benefits to Volunteers
If your nonprofit allows employees to volunteer for the organization’s work, you need to be sure that the legal risks have been mitigated with these steps. Protect your nonprofit’s work by being compliant with federal and state laws. Your nonprofit human resources and volunteer management departments should take the following steps.
Write Up Worker Descriptions
To distinguish between employees, contractors, interns, and volunteers, your nonprofit should create written job descriptions for paid roles within the company to clarify employee classification, status, education, and specific job duties. Volunteer roles should be defined clearly with an emphasis on the volunteer status that has no compensation attached. When an employee also wants to freely volunteer time, a volunteer agreement is vital to acknowledge that volunteer service is separate from employment.
Create Separate Employee and Volunteer Manuals
While it might seem easier to just consolidate work policies into one manual that covers employees and volunteers, it’s important for nonprofits to have a clear divide between their paid workers and their volunteer workers. Overlap in worker policies should be minimal. All employees who also volunteer should have a manual that covers their volunteer work and a distinct, separate manual for their paid work.
Never Allow “Off the Clock” Work
In some cases, an employee may be willing to work off the clock for a time, but in the future, they may sue for unpaid wages and connected penalties. It is the organization’s responsibility to keep track of the employee’s hours and not the other way around. Exempt employees may occasionally be required to work more hours to complete their job responsibilities, but these are generally considered a part of the job—not volunteer hours.
Do Not Strongly Encourage Employees to Volunteer
Within a nonprofit, it can be easy to try to coerce employees to put in more time in order for different types of events to succeed. However, when an employee feels coerced to “volunteer” after their normal work hours, this can easily become a wage and hour claim in court. All nonprofit supervisors should be aware of the difference between employee and volunteer. Forcing employees to work without pay is a violation of nonprofit policy as well as federal and state laws.
Steer Clear of Paying Your Volunteers a “Little Something”
The idea of a volunteer is someone who does work without pay, often out of the goodness of their heart. Paying your volunteers can place them into the category of employee and have negative consequences for the organization, potentially exposing the nonprofit to wage and hour lawsuits. It can be bad for your volunteers as well -- they may lose their protection under the Volunteer Protection Act.
Do Not Offer Benefits Tied to Volunteer Hours
When hours are counted and compensated, this can change a volunteer into the classification of employee. If the payments to the volunteer can be considered a substitution for payment, it’s determined by “whether the amount of the fee varies as the particular individual spends more or less time engaged in the volunteer activities.” (Wage and Hour Opinion Letter FLSA 2005-51)
Please Note: If you are unsure whether or not your nonprofit is complying with the law, contact a lawyer that specializes in nonprofits and employment. This article is just an overview and cannot replace the legal assistance and knowledge of an attorney.
While there are many legal risks to offering benefits to volunteers, a nonprofit can reward their volunteers by offering volunteer-only social events, awards for outstanding volunteering, and nonprofit newspaper highlights. These types of rewards require more attention and effort from nonprofit leadership, but it can be extra meaningful and inspiring to volunteers.