
There are a few key concepts under the Fair Labor Standards Act (FLSA)
that employers must be aware of when it comes to volunteers. An overarching
principle is that individuals may not provide volunteer services to for-profit
companies under any circumstances. That rule is easy to follow, but what about
situations where an employer is “sponsoring” volunteer activities in the
community and encouraging (or rewarding) their employees’ attendance at such
activities? In that situation, caselaw and guidance from the U.S. Department of
Labor (DOL) suggests that a nonexempt employee performing volunteer services
need not be compensated if each of the following criteria are met:
- The volunteer services are provided for religious, charitable, civic, humanitarian, or similar public services;
- The volunteer services are provided without contemplation or receipt of compensation;
- The volunteer services are provided freely without coercion or undue pressure from an employer;
- The volunteer services are provided outside of normal working hours; and
- The volunteer services are unrelated to the employee’s regular duties and the employer’s usual business.
A common issue that arises in these situations is whether an employer
has, directly or indirectly, pressured employees to participate in volunteer
activities. In general, if an employee is treated more favorably or provided
with advancement opportunities because they have volunteered, then the
“volunteers” must be compensated for their time. It does not matter if the
employer proclaims that such volunteering is optional — if it has an impact on
an employee’s standing within the company, it is not truly optional and must be
compensated.
In a March
2019 opinion letter, the DOL attempted to further clarify the
“voluntariness” of a volunteer program. The letter answered questions about an
employer's optional volunteer program where workers perform activities either
sponsored by the employer or chosen by employee. As part of the program, the
employer provided a bonus to “the group of employees with the greatest
community impact.” Workers were compensated for time spent volunteering during
work hours but not for time spent outside of work hours. The DOL also said that
the employer could use an employee's time spent volunteering as a factor
when calculating a bonus without treating volunteer time as hours
worked, as long as a failure to volunteer did not have an adverse impact on the
employee's working conditions or employment prospects.
Given the above, companies should be careful to not dictate or control
its employees’ volunteer activities. While there is nothing wrong with alerting
employees to opportunities or even helping to coordinate those opportunities,
the actual volunteering should be run by an outside nonprofit entity. Further,
employees’ performance ratings and prospects for advancement should not be
positively or negatively affected by their participation in such volunteer
activities. Following these simple steps will keep a positive, feel-good headline
from turning into a real headache for employers.
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