When do volunteers become employees

The first factor examines what the volunteers do. The DOL and courts are more likely to find individuals in a non-sales role, such as docents providing information at a nonprofit hospital or servers passing out free food at a homeless shelter, to be volunteers. For the same reason, a person who already performs the same or related services for a nonprofit on a paid basis cannot perform those services on a volunteer basis at any time, whether during or outside regular working hours.

Similarly, a person who receives significant gifts or monetary stipends to perform work even if less than minimum wage is more likely to be an employee than a volunteer. If your nonprofit engages both paid personnel and unpaid volunteers and paid employees are eligible to volunteer, consider the following tips to increase the safety of your HR and volunteer management practices. Many nonprofit organizations offer some monetary benefit to their volunteers, such as stipends, reimbursement for out of pocket expenses, discounts on services, and so forth.

There are at least two key issues that arise when volunteers receive payment or benefits from the nonprofit organizations they serve. The first issue is whether the payments or benefits are taxable compensation.

In general, a nonprofit employer must treat payments to volunteers the same as payments to employees, which means that income tax and FICA contributions must be withheld.

See 26 U. Living allowances, stipends and in-kind benefits should generally be treated like wages. Inexpensive items e. The more expensive the item or the more frequent its use, the less likely it is to qualify as de minimis benefit.

Keep in mind that a de minimis fringe benefit should never be a form of disguised compensation. But, except as specifically provided i. In-kind benefits that do not qualify for a tax exemption must be assigned a dollar value for tax purposes. Generally, the fair market value of a benefit is the amount an individual would have to pay for the item at a local store or restaurant.

Reimbursements to volunteers are taxable to the same extent as reimbursements to employees. Additional Resources Are we legally required to pay interns? Talent Acquisition Compliance Contingent Staffing. You have successfully saved this page as a bookmark. OK My Bookmarks. Please confirm that you want to proceed with deleting bookmark. Delete Cancel. You have successfully removed bookmark. Delete canceled. Please log in as a SHRM member before saving bookmarks.

OK Proceed. Your session has expired. Please log in as a SHRM member. Cancel Sign In. Please purchase a SHRM membership before saving bookmarks. OK Join. An error has occurred. From Email. To Email. If a volunteer receives any other payment, reward or benefit in kind - including promises of paid work in future - this may lead to them being classed as a worker or employee. Dashboard Make a document Ask a lawyer Get guidance Home.

Profile information Account settings. Make documents Ask a lawyer Get guidance About us. Volunteering is normally associated with charities but other organisations and companies take on volunteers.

It's important to understand the legal aspects of using volunteers to avoid potential disputes. Get started. What is the status of a volunteer?