Recently someone asked me about allowing employees to volunteer for free instead of being paid. I wanted to answer that more fully here because it might be something you have run into or might be considering in your own business.

For starters, here’s the DOL ruling on that. Let’s break it down and look at two broad categories: for-profit and non-profit organizations.

Employing volunteers at non-profits

The Fair Labor Standards Act (FLSA) defines employment very broadly, i.e., “to suffer or permit to work.” However, the Supreme Court has made it clear that the FLSA was not intended “to stamp all persons as employees who without any express or implied compensation agreement might work for their own advantage on the premises of another.” In administering the FLSA, the Department of Labor follows this judicial guidance in the case of individuals serving as unpaid volunteers in various community services. Individuals who volunteer or donate their services, usually on a part-time basis, for public service, religious or humanitarian objectives, not as employees and without contemplation of pay, are not considered employees of the religious, charitable or similar non-profit organizations that receive their service.

As you might expect, non-profits have some leeway here. I talk again at the end of this article about a specific problem non-profits might run into with employees and volunteering. It’s when we get to the for-profit side of things that it really cracks down on what employers can do.

Can paid employees volunteer for their employer?

Under the FLSA, employees may not volunteer services to for-profit private sector employers. On the other hand, in the vast majority of circumstances, individuals can volunteer services to public sector employers. When Congress amended the FLSA in 1985, it made clear that people are allowed to volunteer their services to public agencies and their community with but one exception – public sector employers may not allow their employees to volunteer, without compensation, additional time to do the same work for which they are employed. There is no prohibition on anyone employed in the private sector from volunteering in any capacity or line of work in the public sector.

Okay, so that helps us understand if employees can volunteer their time.

• Private/for-profit=no
• Public/for-profit=yes, as long as the person isn’t an employee doing the same work they normally perform

Even if the employee wants to do it and offers, there is still the chance that the employer would be seen in a negative light. Remember my visit to the OFCCP a few years back? Here’s the highlight of the visit:

Ever heard the phrase “innocent until proven guilty?” Not the way of life with the OFCCP, apparently. During the seminar, the speaker reminded us that having interview notes and other data available could help in the event of an investigation. However, in the next second he casually mentioned, “If you don't have the data to back up your claims as to why person X was paid differently from person Y and one of them is a minority, we will assume the worst intentions.”

I've been around the business world long enough to know that if you're looking for trouble, you'll find it. If you assume the worst, you'll find something to substantiate your claim, no matter how minuscule.

Even if the person is a good employee, there’s no guarantee that will always be the case. DOL audits aren’t started by employees who are happy with their work. They are started by people who are generally unhappy or even those who had a single rough day at work and are looking for a way to fight back. Keep that in mind–it happens to everyone.

Can employees volunteer to work fewer hours?

There is an interesting tangential discussion that I wanted to include here. One of our employees at a previous job was interested in reducing her work schedule to help get through lean times without eating up all of her vacation time. In that instance, exempt employees can voluntarily reduce their work hours, and their pay, without causing issues for the employer.

In that instance, I simply had her draft a short email to her manager and me stating that. The verbiage was something like:

To Whom It May Concern: 

I realize that we are seeing tighter budgets and I would like to voluntarily request a 32 hour (4 days per week) schedule every other week until further notice. I understand that I will not be compensated for the additional 8 hours I take off and that those hours will not be deducted from my leave balance. I also understand that my manager can recall me to full time service at any time without notice. 

Sincerely, 

Jane Doe

Again, if we had simply told the person to stop coming one day every other week, that could have opened up some FLSA issues since technically the person could have said they were an exempt professional ready and willing to work (thus owed their full compensation).

Can volunteers be considered employees?

One final area to cover. Can volunteers be treated like employees? As we have seen, for-profit organizations would do well to stay away from the entire concept of volunteers. For that reason we’ll discuss nonprofits. If given the option, I would try to avoid having volunteers performing any work that other ordinary employees are doing. That helps to keep the “swim lanes” separate and can help to avoid any issues between staff. Imagine doing work for free that the other person next to you is being paid for and you’ll quickly understand that concept.

We used volunteers when I worked at a nonprofit organization and the screening process was handled outside of the normal employment process for the sake of simplicity. We didn’t want to clutter up an already busy hiring process with people who wouldn’t technically be employees.

What other thoughts do you have about employees and volunteering?