It is becoming increasingly popular nowadays for companies to support charitable organizations and causes through sponsorships, events, and employee volunteer programs. This may contribute positively to the workplace culture and even be considered a perk for some employees…but what is the law in terms of wages for volunteer time? Laws will vary depending on whether you work in the public or nonprofit sector vs the for-profit, private sector.
In a recently released Department of Labor (DOL) Opinion Letter [FLSA2019-2], the DOL tackled the issue of whether an employee’s time spent participating in an employer’s optional volunteer program, which awarded certain bonuses for participation, was considered hours worked under the Fair Labor Standards Act (FLSA). This is an important issue for those employers who want their employees to “volunteer” for or at charitable events, but who don’t want to run afoul of an employer’s obligations to compensate non-exempt employees for “all hours worked.”
In this particular situation, the Company (the Opinion Letter did not disclose whether it was a private or public entity) had an optional volunteer program that awarded a monetary bonus to the team with the most community impact. Specifically:
- Under the program, employees engaged in certain volunteer activities that either the Company sponsored or the employees selected.
- The Company compensated employees for the time they spent volunteering during working hours or while they were required to be on Company premises; however, many of the volunteer hours were outside of normal working hours.
- At the end of the year, the Company rewarded the group of employees with the greatest community impact with a monetary award that the winning group’s supervisor had discretion to distribute.
- The Company did not require employees to participate in the program or direct or control their participation.
According to the DOL, an employer may use an employee’s time spent volunteering as a factor in calculating whether to pay an employee a bonus, without incurring an obligation to treat that time as hours worked. However, in such instances, the following conditions must be satisfied: (1) volunteering must be optional; (2) choosing not to volunteer cannot have any adverse effect on the employee’s working conditions or employment prospects; and, (3) bonuses must not be guaranteed. In this instance, the DOL concluded that these conditions were met and this particular program did not count as hours worked under the FLSA.
Employers must be careful when notifying non-exempt employees of volunteer opportunities, ensuring that such activity occurs during non-working time, that employees understand that their participation is, in fact, optional, and that employees do not feel that choosing not to participate will negatively impact their employment. Generally, if an employee receives a “suggestion” from his or her supervisor to volunteer at a certain event, he or she will not think it is optional, especially if a potential bonus could result, and therefore, it is incumbent on the employer to ensure the message is clear.
If you offer any sort of volunteer program or hours at your workplace, it’s a good idea to have a volunteer policy in place that provides clear guidelines for employees so that you can continue to encourage volunteerism and serve the community while ensuring all obligations are being met. The Employment & Labor law team at Ward Damon can help create a policy that works for you and help you understand the FLSA laws and how they apply to your business.
Bari Goldstein is a partner at Ward Damon who focuses her practice on preventative labor and employment defense work and represents and counsels private, not-for-profit and public sector employers on varied regulatory, administrative and litigation issues that affect all aspects of the employment relationship. Bari is certified as a Senior Professional in Human Resources (SPHR) by the Human Resources Certification Institute (HRCI) and as a Senior Certified Professional (SHRM-SCP) by the Society for Human Resource Management (SHRM). She is also a qualified EEO investigator. If you have Employment & Labor matters that you would like to discuss, you can contact Bari at email@example.com or 561-842-3000.