Is That Volunteer Working Your Charity Fundraiser Really Your Employee?
You are the chair for the 25th Annual St. Paddy’s Day BBQ. Lots food and fun and games and a dance and everyone has a good time. The following week the checks are cleared the bills are paid and—faith and begorrah—you made a healthy return sufficient to give the parish school’s scholarship fund a healthy infusion. But joy quickly turns to dismay when the office gets a letter from a lawyer representing numerous “volunteers” who were invited by parishioners to help out at the event. The letter asserts that the volunteers were really “employees” and, as such, they are entitled to tens of thousands of dollars in unpaid minimum wage, overtime and failure to provide required rest breaks and meal periods, not to mention liquidated damages, waiting time penalties and additional penalties for failing to provide proper pay stubs. There goes the scholarship fund.
“This can not be happening,” you say to yourself. “Are they really our employees? Do we really owe all this money?” That all depends.
California’s Industrial Welfare Commission Orders define the wage and overtime rules along with the California Labor Code. There is no exception in the Wage Orders for employees of religious organizations. However, members of religious orders or “volunteers” are exempt under certain conditions. California Division of Labor Standards Enforcement Opinion Letter 1988.10.27.
The intent of the parties determines whether one is a volunteer or an employee. If the person intends to volunteer his or her services for public service, religious, or humanitarian objectives, not as an employee and with no expectation of pay then the individual is not an employee of the religious, charitable, or similar nonprofit corporation which receives the services. A regular employee of a religious, charitable, or nonprofit organization may donate services as a volunteer as long as the services are not the usual duties of that employee’s job.
However, when religious, charitable or nonprofit organizations operate commercial enterprises which serve the general public, such as restaurants or thrift stores, or when they contract to provide personal services to businesses, such enterprises are subject to the Industrial Welfare commission Orders and volunteers may not be utilized.
If the person performing the service is an employee, that person must be paid pursuant to the IWC Orders. If the person is truly a volunteer, with no expectation of any pay, and is not performing services of a commercial nature, the person is not covered by the IWC Orders.
The remaining question is whether public service exception only applies to entities that are incorporated. The DLSE has not addressed this issue and there is no court opinion directly on point. However, given the strong public policy in encouraging volunteerism in statutes addressing unpaid volunteers in public agencies and voluntary participation in athletic programs sponsored by public agencies and non-profit and for profit schools and colleges, I would expect that any type of organization would be able to take advantage of the volunteer exemption. Incorporation would make a stronger case and fit nicely within the Opinion Letter.
America is rich with all kinds of voluntary associations, fraternities, communities, service club that perform myriad varieties of good works that benefit or communities and our nation. All that effort will be encouraged by a legal framework that honors the volunteer service its members and their associates by not making it an invitation to claims for compensation.
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