In this economy we are seeing employers looking for ways to cut costs (including payrolls) and job seekers looking for ways to get noticed, such as offering to work for free to “show what they’ve got.” While these might seem like good ideas—offering an opportunity to learn in exchange for the person’s labor; offering labor in exchange for a potential job—these situations could run afoul of the Fair Labor Standards Act (“FLSA”), the federal law that governs wage and hour regulations, as well as parallel state laws.
Under the FLSA, employment is defined broadly as “to suffer or permit to work.” If you “employ” someone (i.e., you let them work for you), you need to pay that person according to the often complex and confusing rubric of state and federal wage and hour laws.
Can anyone volunteer? Yes. . . but only in the public or not-for-profit sectors, for example for the local public library, a religious or a charitable organization. People can volunteer for the homeless shelter, “meals-on-wheels,” or the local hospital. People can volunteer to help with disabled children or can volunteer for their local ambulance corps or fire house. The only caveat is that public and not-for-profit sector employees can only volunteer for their own organization or agency if there is no undue pressure to volunteer and the volunteered services are “not the same type of services” which the individual is employed to perform for such public agency.” A paid firefighter cannot volunteer for his or her own fire company, but can volunteer as a firefighter in another county. An office worker for a hospital may volunteer to sit with a sick patient as an act of charity, but cannot volunteer to perform additional administrative duties. (DOL Field Operations Handbook § 10b03(d), p.5.) Private companies, however, as a matter of law, simply cannot have “volunteers,” no matter how enticing it is.
Should a private company use the services of a volunteer, the company will be liable for minimum wage payments, potentially overtime pay, unemployment taxes, workers’ comp taxes, and the whole myriad of other obligations one has when a company has employees, as well as fines, fees and penalties for the violation. If a volunteer brings a suit, the company could also wind up paying the alleged “volunteer’s” attorneys’ fees. For this reason, it is best for companies to get it right from the start.