Some of the most significant costs that can be incurred by any organization are those associated with salaries for staff. The end result is that many nonprofit and for-profit organizations go to great lengths, where possible, to characterize individuals as anything other than normal employees. There may also be occasions when individuals will approach an organization with an offer to volunteer or intern for free as a way of gaining experience.
As tempting as “free” may be, you should weigh carefully whether to accept such an offer or to characterize workers in such a fashion. The Washington Minimum Wage Act and the federal Fair Standards Act both make it clear that if you “suffer” or permit someone to work on your behalf, they are entitled to be paid for their time. A failure to do so may result in you being liable for at least the minimum wage, and perhaps overtime, associated with the work at issue plus additional penalties and/or liquidated damages.
The U.S. Department of Labor and the Washington Department of Labor and Industries take the general hardline position that employees cannot volunteer services to for-profit employers. Such businesses exist primarily to generate a profit, and those working on their behalf will likely be considered employees.
There is obviously leeway for educational, charitable, religious and other nonprofit organizations. Depending on the specific circumstances, an individual can volunteer for such entities as long as there is otherwise no employer-employee relationship and he/she gives their services gratuitously to the organization. If someone already works for a nonprofit as a regular employee, that person cannot then volunteer (or be volunteered) their time to do tasks that fall within their job description. If they volunteer, the situation will be scrutinized to see if the activity occurred within the employee’s normal working hours and is similar to job-related activities already being done by the individual. For example, a nurse for a nonprofit organization will likely not be able to volunteer, no matter how worthy the cause, to provide nursing services to that entity. However, he or she may be able to volunteer at a check-in table for a fundraising event since that would likely be considered very different from his or her normal job.
If the individual does qualify as a volunteer, you may be able to offer that person a nominal fee or stipend. However, this amount may not be a substitute for wages or tied to productivity.
State and federal law both allow for unpaid interns, even in regards to for-profit entities. However, there is strict criteria that must be met:
- The training must be similar to that which would be provided in an educational environment;
- The training is primarily for the benefit of the intern;
- The intern will not displace regular employees and works under the close supervision of existing staff;
- The employer derives no immediate advantage from the activities of the intern, and, on occasion, may actually be impeded by the presence of the intern;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
In short, the relationship is meant to train/educate the intern and not profit the employer. If the program is structured primarily around the employer’s operations, then there is a high risk that the individual in question will be deemed to be an employee and entitled to pay.
There continues to be a rise in wage and hour lawsuits whether as individual or class claims. These are expensive cases and normally entitle a successful plaintiff to attorneys’ fees as well as the lost wages and penalties/damages. Take the time to properly investigate and set-up any volunteer or intern relationship. Otherwise, that “free” help may cost you dearly.
Clarence Belnavis is a partner in the NW Regional Office of Fisher & Phillips LLP. He has substantial experience handling various types of employment litigation including disability, racial, and gender discrimination; retaliation; sexual harassment; and wrongful discharge. He also represents employers in wage and hour claims, employment class actions and traditional labor matters.