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Can Your Business Use Volunteers?

by Galia Aharoni Schmidt, Founding Partner

Hiring employees can be a burdensome and expensive adventure if you’re a business owner, and it can be tempting to use volunteers to fill in some gaps — especially if you’re a socially conscious company with volunteers knocking on your door offering their services. So can your business use volunteers? And if so, when?

If you’re a nonprofit:

Nonprofits are allowed to use volunteers, and those volunteers aren’t covered by the rules requiring things like minimum wage and overtime. They are, however, covered by the Volunteer Protection Act, which limits lawsuits against some nonprofit volunteers, and protects them from liability for harm they may have done on behalf of the organization (except for things like criminal conduct or auto accidents). 

If the nonprofit volunteer’s work is for public service, religious, or humanitarian objectives, and the service is performed without the contemplation of pay, they are not considered an employee. If a volunteer is paid a stipend of over $500 a year or more than 20% of what an employee would be paid for that work, the volunteer will instead be treated as paid staff, and employment laws then apply. Things like limited value thank-you gifts to recognize a volunteer’s service will not count as wages.

Some questions to ask yourself if you’re a nonprofit seeking volunteers:

  • Is the worker motivated by a personal civic, humanitarian, charitable, religious, or public-service motive?
  • Are the services performed typically associated with volunteer work?
  • Are the services provided different from those typically performed by paid workers and are the hours of service less than full time?
  • How much control does the nonprofit exert over the volunteer while she or he is performing services?
  • Does the volunteer typically arrange his or her own schedule to provide services when it is convenient for the volunteer?

The answer to these questions will shed light on whether the worker is actually an employee masking as a volunteer. If you need help doing this analysis, a business or nonprofit lawyer can help you make sure you’re following all requirements for nonprofit volunteers.

If you’re a for-profit:

Unfortunately, even if someone wants to be a volunteer for your for-profit company, anyone who does work for your for-profit company is probably an employee, and is entitled to wages and all of the other protections owed to an employee with only limited exception. (Note: We’ll be publishing an article about how to legally hire interns soon!)

If you’re a for-profit company that has a humanitarian purpose, such as a benefit corporation, different rules may apply to you, so check with your lawyer for help.

The same rules apply for barter and work-trade relationships. If someone is doing work, and you’re a for-profit company, they must be paid wages and given all of the rights of an employee.  Generally, a barter or work-trade relationship will just be considered illegal volunteer work with perks– or just an employee who needs to get paid. 

While barter is acceptable between businesses (for example, a lawyer drafting you a document in exchange for a year’s worth of the services/goods you provide), it’s not acceptable in a worker situation. 

Are you part of a nonprofit or for-profit company that wants to clarify you’re following the law? Or a volunteer seeking to understand your rights? Get in touch with us to make sure your situation abides by all of the rules. We’re glad to help!