My last post was about unpaid internships. This post is about volunteers (that is, people who work for nothing).
The Department of Labor has not issued regulations or guidance on when a for-profit employer may use volunteers. In any event, generally, for-profit employers who are subject to the Fair Labor Standards Act (“FLSA”) should not use unpaid volunteers. In almost every case, it will be a violation of the FLSA if they do use volunteers. (At the very least, if a for-profit employer is about to use a volunteer for certain tasks, it should seek the advice of legal counsel first.) Not for profit employers and governmental agencies, however, may be able to use volunteers without violating the FLSA under the right circumstances.
The leading court opinion on when the use of unpaid volunteers may be allowed under the FLSA is Tony and Susan Alamo Foundation et al. v. Secretary of Labor. 471 U.S. 290 (1985). The Foundation was a non-profit religious organization that obtained most of its income from operating a number of commercial businesses. The businesses were staffed by the Foundation “associates” who were mostly recovering drug addicts, former derelicts, or former criminals who had been helped by the Foundation. The associates received no cash salaries, but were provided with food, clothing, housing, and other benefits. Many of them had been with the Foundation for a number of years.
The Supreme Court held that the associates were employees and should have been paid under the FLSA. Significant for the Court was the fact that the associates were provided with in-kind benefits (food, clothing, etc.) in exchange for their services over a long period of time. The Court pointedly stated, “The Act reaches only the “ordinary commercial activities” of religious organizations, 29 CFR § 779.214 (1984), and only those who engage in those activities in expectation of compensation. Ordinary volunteerism is not threatened by this interpretation of the statute.”
After the Alamo Foundation case, the FLSA was amended to include the following provisions:
(4)(A) The term “employee” does not include any individual who volunteers to perform services for a public agency which is a State, a political subdivision of a State, or an interstate governmental agency, if–
(i) the individual receives no compensation or is paid expenses, reasonable benefits, or a nominal fee to perform the services for which the individual volunteered; and
(ii) such services are not the same type of services which the individual is employed to perform for such public agency.
(B) An employee of a public agency which is a State, political subdivision of a State, or an interstate governmental agency, may volunteer to perform services for any other State, political subdivision, or interstate governmental agency, including a State, political subdivision or agency with which the employing State, political subdivision, or agency has a mutual aid agreement.
29 U.S.C. § 203(4).
(5) The term “employee” does not include individuals who volunteer their services solely for humanitarian purposes to private non-profit food banks and who receive from the food banks groceries.
So, it appears that volunteers for non-profit organizations and public agencies may not be held to be “employees” under the FLSA if the volunteers do not engage in any “ordinary commercial activities” (for example, work in the gift shop of a non-profit hospital) and do not have any expectation of compensation in any form, except as allowed under the FLSA provisions set out above.