When Are Volunteers Entitled to Wages?

People volunteer their time for many different reasons. Volunteering for a charitable organization provides opportunities to help the less fortunate. Young people might volunteer for VISTA or accept a student internship to gain work experience and build a more impressive résumé. Retirees sometimes volunteer as a way of staying active and avoiding boredom.

Yet businesses sometimes take advantage of the willingness to volunteer in order to evade wage and hour laws. As a general rule, when a golf club or other for-profit business compensates volunteers with benefits (such as free rounds of golf) instead of wages, the business is violating the worker’s right to receive a wage.

Wage Payment Laws

The federal Fair Labor Standards Act and its Florida equivalent require employers to pay minimum wage to employees and overtime to nonexempt employees. An employer is any entity that permits an employee to work for the interest of that entity. As a general rule, when someone performs work at the direction of a business, the worker is an employee who is entitled to minimum wage and overtime compensation.

There are, of course, exceptions to the general rule. Individuals who are self-employed as independent contractors are not employees, although businesses sometimes misclassify an employee as an independent contractor to avoid complying with employment laws. In most cases, however, someone who performs work as directed by a business and for the benefit of a business must be classified as an employee of the business. Employers must pay employees minimum wage and must comply with overtime regulations.

The Volunteer Exception

Individuals who volunteer their services to a public agency or to a private, non-profit organization might be exempt from wage and hour laws if:

• services are provided for civic, charitable, humanitarian, or religious reasons without any promise or expectation of compensation;
• services are provided freely, without any form of coercion;
• the work is temporary or part-time; and
• the volunteer is not employed by the agency or organization to provide the same services.
  

Student interns who work for a nonprofit organization may also be exempt from the coverage of wage and hour laws, provided that they do not displace employees and meet certain other criteria. Interns may be paid a stipend, while volunteers must be unpaid.

Notably, the volunteer exception only applies to certain public agencies and private, nonprofit organizations. It does not apply to for-profit businesses. Nearly every business that exists to make a profit must comply with wage and hour laws, even if a worker agrees to work for free. Employees cannot waive the protections provided by the FLSA.

Trading Work for Benefits

Workers are sometimes encouraged to provide services to a business in exchange for a benefit. Golf clubs are a notorious example. Florida golf clubs have a long history of providing free rounds of golf in exchange for “volunteer” services, such as first-tee starters, on-course assistants (“course rangers”), bag room or cart attendants, and operators of ball pickers in driving ranges.

Some golf course websites advertise their violation of the law with statements like: “Complimentary use of the golf course is provided to volunteers.” According to news reports, even municipal and university golf courses in Florida have traded free golf for “volunteer” services. However, state and local governments are not exempt from FLSA requirements.

Golf courses contend that trading work for free rounds of golf is a tradition. That may be true, but the fact that a practice is longstanding does not make it legal. Moreover, wage and hour laws exist in part to promote employment. When golf courses use volunteers to perform services, they are depriving the labor market of jobs that should be filled by paid employees.

The FLSA recognizes limited circumstances under which “in-kind” compensation — primarily lodging and food — may be used to satisfy the requirements of wage laws. Free rounds of golf, waiving the fee to use health club facilities, and similar exchanges of benefits for work cannot be used to satisfy minimum wage or overtime laws.

“Tips Only”

Employers that allow workers to keep tips but pay no other compensation are also in violation of the FLSA. While certain employers are allowed to claim a “tip credit” as partial satisfaction of minimum wage laws, those employers are still required to pay a wage that is set by law. Employers who claim that a “volunteer” is “working for tips” are almost always violating the FLSA.

Some restaurants have a policy of limiting the number of hours a server, bartender, or other tipped employee can work for wages, while allowing those employees to continue working “off the clock” for whatever tips they can earn. Even if the employee actually collects more than minimum wage by working for tips only, both “off the clock” employment and “tips only” compensation violate the FLSA.