Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

© 2022 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2022 ed. | 57 3. Whether the activity is less than a full-time occupation 4. Whether regular employees are displaced by the “volunteer” 5. Whether the services are offered freely without pressure or coercion 6. Whether the services are of the kind typically associated with volunteer work 319 In applying this test, courts tend to focus on the benefit conferred on the organization by the worker. 320 If the organization relies too heavily on its “volunteers,” courts are likely to find that the individuals’ services are for the benefit of the employer and deem the individuals to be employees. 321 In addition, if an individual performs “volunteer” work in exchange for some important benefit, such as housing, the threat of losing that benefit might lead a court to hold that the work was not free from pressure or coercion. 322 An organization may occasionally wish to pay its volunteers a stipend or offer some benefit in exchange for their services. The FLSA permits volunteers to receive compensation for their expenses, reasonable benefits, or a “nominal fee” without losing their exempt status. 323 The FLSA does not define what constitutes a “nominal fee,” but regulations specify that such payments must not be substitutes for compensation or linked to productivity. 324 Generally, payments that increase with the number of hours worked or the amount of work done strongly suggest that a worker is an employee and not a volunteer. 325 In addition, to be considered a “nominal fee,” the sum of the payments to a volunteer should not exceed 20 percent of what a regular employee would be paid for performing the same service. 326 319 DOL Wage & Hour Opinion Let ter FLSA2001-18 (July 31, 2001). 320 See, e.g. , Hallissey v. Am. Online, Inc., 2006 U.S. Dist . LEXIS 12964, at *34 (S.D.N.Y. Mar. 10, 2006) (denyingAOL’s mot ion for summary judgment because an issue of material fact existed as to whether “volunteers” were employees for FLSA purposes where internal company memoranda and test imony confirmed that AOL “viewed it s volunteer force as something that was advantageous to it s business”). 321 Id. 322 Genarie v. PRD Mgmt., Inc. , 2006 WL 436733, at *12 (D. N.J. Feb. 17, 2006) (finding a worker was not a volunteer because she performedwork in exchange for lodging, and the fear of losing her housing meant she was not free from coercion or pressure). 323 29 C.F.R. § 553.106(a). While this regulat ion is limited to state and federal government s, common sense suggest s that the rule applies more broadly. The regulat ion list s several factors to consider in determiningwhether a fee is nominal: the distance t raveled; the t ime and effort expended by the volunteer; whether the volunteer has agreed to be available around-the-clock or only during certain specified t ime periods; and whether the volunteer provides services as needed or throughout the year. An individual who volunteers to provide periodic services on a year-round basis may receive a nominal monthly or annual st ipend or fee without losing volunteer status. See also DOL Wage & Hour Opinion Let ter FLSA2004-6 (July 14, 2004). 324 29 C.F.R. § 553.106(a); DOL Wage & Hour Opinion Let ter FLSA2008-16 (Dec. 18, 2008). 325 29 C.F.R. § 553.106(a); DOL Wage & Hour Opinion Let ter FLSA2008-16 (Dec. 18, 2008). 326 29 C.F.R. § 553.106(a); DOL Wage & Hour Opinion Let ter FLSA2008-16 (Dec. 18, 2008).