Have you heard the one about that time Urban Outfitters looked up to its employees and shouted "Volunteer for us!" and the employees whispered "no?" [*]
Last week, Urban Outfitter's parent company URBN had execs send an email to salaried employees offering the employees the golden chance to "volunteer" over a few weekends at a packing and shipment facility. Unfortunately for Urban Outfitters, the Fair Labor Standards Act, every Federal Circuit, and the Supreme Court agree that a volunteer is not an employee and vice versa, leading me to think URBN could use a basic "employee vs. volunteer" refresher.
As with many great employment law debates, there is no clear cut "test" to determine if a volunteer is truly a volunteer or riding the fine line to employee-status. However, there are some widely recognized factors courts look to under the infamous "totality of the circumstances" test. This means any employer (public or private) should also consider these factors BEFORE classifying someone as a volunteer. Here are the factors:
1- No Expectation of Compensation.
This one should be a no-brainer. We volunteer our time to certain events, functions, and groups because of the personal fulfillment and not the $$$. If an employer even slightly alludes to the fact that compensation will be received in exchange for volunteer time, you may find yourself in a heated misclassification battle that rarely ends well. On that note, it is not wise to "test drive" an employee by having them start as a volunteer. If the court thinks you have used the volunteer time as a vessel to employment, that may be enough to tip the cards in favor of that volunteer actually being an employee (hint: this is not good).
2- Immediate & Primary Benefit is to the Individual and NOT the Employer.
If the "volunteer" is receiving the primary benefit of his or her work (e.g. additional knowledge for school, experience for applications, fulfilling probation requirements, etc) then they are probably classified correctly. If the employer is the primary beneficiary of the work, not so much. Example: You are asked by a grocery store to volunteer by bagging groceries for paying customers. Because the grocery store is the primary beneficiary (and the work is integral to the business- see factor #3), the "volunteer" may need to be compensated as an employee for his or her time (hint: this means minimum wage, overtime, etc).
3- Whether the Work Performed is Integral to the Employer.
Volunteers play benign, auxiliary roles in a business. Employees perform essential work. Recall that the FLSA was enacted in the 1930's to combat companies with an unfair advantage by paying employees substandard (read: really low) wages. Not paying people for work that keeps the business alive would be counter to the entire purpose behind the FLSA.
4- No Coercion or Pressure.
Once again, should be a no-brainer. You cannot "force" people to volunteer. This means it cannot be a requirement, which in turn means the "volunteer" should have the freedom to come and go without major repercussion. You can have "rules" but you cannot have "demands."
5- Time of the Activity & Part-Time vs. Full-Time.
Traditionally, courts like to see volunteering that takes place outside of the volunteer's "normal working hours." Time spent "volunteering" during normal working hours may be construed as an employee-employer relationship. Also, courts favor volunteer terms that equate to part-time work. Volunteering full-time is possible but it is a factor often weighed in favor of the employee-employer relationship.
6- Similarity to Job Duties.
Based on recent Department of Labor opinions, you cannot volunteer to do the job you already have. In other words, it is very, very, very, very rare that someone can safely be a volunteer for the same work they do as an employee. If a volunteer does perform work he or she typically does at their job, the DOL would argue that the volunteer is really an employee at that point and needs to be paid for the time.
7- Length of Relationship.
Volunteers probably shouldn't last forever. The longer the relationship, the more likely a court will consider the relationship that of employee-employer.
8- Non-Profits vs. For-Profits.
The FLSA accounts for public sector and non-profit volunteerism but does not mention private sector volunteerism. THIS IS A TRICKY SITUATION. Courts have not been very clear on this issue but it can be assumed that "volunteering" for a for-profit company may be risky and the presumption may favor the employee-employer relationship. All the above factors would also apply.
To briefly conclude, I find it absurd that URBN asked its salaried employees to "volunteer" on weekends in a packing and shipment facility. From recent news reports of the scandal, it appears the URBN exec email stated that the volunteering would be "fun" and suggested it would be similar to a team-building experience. Please. Even without know all the specifics of the situation, I would strongly advise URBN against this scheme and would advise any of my readers with regular volunteers to run through the factors and make sure you don't get caught up in a similar media storm.
Also, just as a side note- these same factors are applied to the infamous "unpaid intern." Better round-up your college interns and apply these factors to their day-to-day work.
[*] Borrowed from the greatest book of all time. You're welcome.