Are School Employees Working or Volunteering?

Fundraising events: Whether they're one-offs for a special capital campaign or a school tradition, fundraising events are profitable, engaging ways for your school to raise money. Such events often require you and your team—along with a volunteer cadre of parents and community members—to put in time before, during, and after the event to make it successful, often without pay and "volunteering" their efforts.

But can school employees work as volunteers when they pitch in for fundraising events? Should they be paid for their time? The answers to these questions could determine whether your school could face repercussions with the U.S. Department of Labor.

Volunteering for a Nonprofit

Most private-independent schools are established nonprofits, meaning that laws that pertain to for-profit organization might not apply to your school. Still, as an employer, your school has certain responsibilities toward its employees, including fairly compensating them for time they've spent working.

This situation creates a blurred line between an employee's billable work and what "elective" tasks can be considered volunteering,and so not requiring monetary compensation. To assist nonprofit employers in similar pickles, the U.S. Department of Labor has listed specific criteria that—if fulfilled—qualify employees' work to be classified as "volunteering."

1. The services are entirely voluntary, with no coercion by the employer, no promise of advancement, and no penalty for not volunteering. "Penalties" might be prevention of advancement if a certain number of "volunteering" hours are not met or retaliatory acts that can be connected to an employee's refusal to volunteer.
2. The activities are predominantly for the employee’s own benefit. This could mean nothing more than the fact that an employee gets an intrinsic satisfaction out of helping at the event. Again, every employee should be volunteering of his or her own free will—not coerced through peer pressure or fear of retaliation.
3. The employee does not replace another employee or impair the employment opportunities of others by performing work that would otherwise be performed by regular employees. For example, if you have one of your "volunteering" employees clean up after an event and dismiss the (paid) janitor from completing what would've been his or her regular duties, the janitor may have grounds for a complaint with the labor board.
4. The employee serves without contemplation of pay. This rule is an easy one to keep. Simply make sure your employees understand that they're volunteering their time!
   
5. The activity does not take place during the employee’s regular working hours or scheduled overtime hours. The recurring theme with these rules plays out again here: Employers cannot put an employee's regular compensation at risk.
6. The volunteer time is insubstantial in relation to the employee’s regular hours. Of course, "insubstantial" is deliberately vague and allows for individual case evaluation, so use common sense. Asking your employees to volunteer 10 hours of their time every week for various events, for example, may be putting their "volunteer" status at risk.
   

Exempt and Nonexempt

So, in reviewing the guidelines above, you notice that your employees don't qualify as volunteers for your event. Perhaps you're hosting the event during regular business hours, or maybe you've tied your advancement structure to require a certain quantity of "volunteering" hours for school events. Both of these situations mean that the Department of Labor counts their efforts during your event as "workable"—and thus billable—hours.

Even if this is the case, though, it doesn't necessarily mean that you have to pay them—depending on how the employee has been classified.

In a previously published e-Letter article, we discussed how the Fair Labor Standards Act (FLSA) affects various types of employees working outside of regularly established work hours. Basically, the law separates employees into two categories: Exempt and nonexempt. (A quick way to tell the difference: If employees are classed as "exempt," they are typically paid by salary; if employees are "nonexempt," they are typically paid hourly and thus qualify for overtime payment according to the FLSA and other local laws.)

Exempt staff aren't an issue in terms of extra payment. As they're "exempt" from FLSA overtime requirements, they'll receive the same compensation as long as they work any part of a week. Working an extra fundraising event, while potentially arduous, doesn't affect how much they'll earn in the pay period.

Nonexempt employees are another story, however. To quote:

• If a nonexempt employee works extra hours during a week (such as at evening or weekend events), they must be paid for those extra hours.
• If nonexempt employees work more than 40 hours in a week, they must be paid at the overtime rate (1.5 times their regular rate of pay) for all hours over 40. In some states, they must also be paid overtime for hours worked over eight hours in a day.
• Nonexempt employees can’t legally opt-out of being paid for their time-worked – nor can they be given “comp time” as a replacement for overtime hours worked.

This means that, while employees may not technically be volunteers, you still might not need to shell out extra money to stay on the safe side of the law.

As always, we've given you these pointers and tips as a starting place, but every school's situation is unique. When in doubt, consult your school's legal counsel to protect everyone—school and employee alike.

Additional ISM resources:
ISM Monthly Update for Development Directors Vol. 9 No. 2 The Perils of 'Requiring' Employees to 'Volunteer' for After-Hours Events
ISM Monthly Update for Business Officers Vol. 8 No. 3 One of a Business Manager's Many Hats: Warding Off the Investigators (or, "10 Key Facts You Need to Know About Overtime Regulations")

Additional ISM resources for Gold Consortium members:
I&P Vol. 37 No. 3 The Fair Labor Standards Act: Getting Overtime Right
I&P Vol. 25 No. 2 When Is a Volunteer a Volunteer