In the Public Sector, Volunteers and Interns are not Employees
The Fair Labor Standards Act (FLSA) broadly allows public employers to accept services from "volunteers." Volunteers are defined as individuals who perform services for a public agency "freely and without pressure or coercion direct or implied from the employer … for civic, charitable or humanitarian reasons, without promise, expectation or receipt of compensation for their services." However, volunteers can be reimbursed for their expenses, receive reasonable benefits, a nominal fee or any combination of these without losing their status as a volunteer.
The FLSA's regulations state that in order for an individual providing service to a public employer to qualify as a volunteer under the FLSA's public employer volunteer exception:
- Individuals must not be paid for their services, except the entity may pay them for their expenses, reasonable benefits, a nominal fee, Workers Compensation and other insurance benefits or any combination thereof. Where pay is more than nominal and tied to the number of hours of service, volunteer status will be subject to close scrutiny.
- There must be a clear understanding between the individual and the entity that the person without any pressure or coercion from the entity is volunteering without contemplation of pay for civic, charitable or humanitarian reasons. A "volunteer agreement" can be helpful in evidencing that understanding.
- The person must not at other times provide the same services to the same entity for pay. Simply put, employees cannot provide volunteer hours in addition to their regular jobs.
In addition to allowing public employers to accept the services of volunteers under the conditions set forth above, the FLSA allows all employers to have unpaid interns if all seven of the following factors are true:
- What the intern does is similar to training provided in an educational environment
- The internship is for the benefit of the intern
- The intern does not displace a regular employee
- The intern works under close supervision
- The employer receives no immediate benefit from the activities of the intern and, on occasion, the employer's operations may even be impeded
- The intern is not necessarily entitled to a job at the end of the internship
- The employer and the intern have a clear understanding that the intern will not be paid.
While not bulletproof, if the Department of Labor does an audit or the person later claims wages are due, it's helpful to have a statement from interns or trainees before they begin their internship, outlining the internship's purpose and benefit to them, including an agreement and understanding that the internship meets each of the FLSA's seven required factors. Of course, what actually happens in the workplace, rather than the statement the person signed, will be the deciding factor if there is a question about the person's status: whether the person qualified as an unpaid intern or should have been paid as an employee. Sometimes things change, and a great intern may at some point start to function as an employee. If that happens, the employer should end the internship by hiring the person or letting the intern go.
Anne G. Scheer is an attorney with Devine Millimet & Branch, P.A. and a member of the firm's Labor and Employment Law Practice Group. She may be contacted by email.