You might think that volunteers are all wonderful people who simply want to give back to their communities, but nonprofit organizations must protect themselves. Enlisting the aid of volunteers in America can be a treacherous situation with labor laws and tax requirements. In order for you to run a safe, healthy and legally sound nonprofit organization, you must be very clear about volunteer status when recruiting.
Rules for Volunteers: Make it Clear
Volunteers must understand from the very beginning that there will be no compensation for volunteering for your nonprofit organization. In most cases, you should have all volunteers sign a waiver that explicitly states that they have no expectation of wages or benefits in exchange for their work.
This is important because if, at a later date, the volunteer decides that he or she wants to sue your nonprofit for nonpayment of wages – even if it is a volunteer position – he or she can argue that there was no agreement made about volunteering, and that he or she was hired as an employee. If you have nothing in writing to argue otherwise, you could be in deep trouble.
Rules for Volunteers: Economic Reality
Even if both parties – the nonprofit and the volunteer – understand that the position is voluntary and not employment, you could find yourself liable for monetary damages. The courts use a system called the “Economic Reality Test” to determine whether an individual is a volunteer or an employee. If your volunteer depends on your nonprofit for food, shelter, income, benefits or any other compensation, he or she could be found to be an employee, which would make your nonprofit subject to wage and hour laws as well as workers’ compensation and benefits.
For the reasons listed above, you must be very careful when money changes hands. Let’s say, for example, that one of your volunteers has purchased a cardboard table for use at your nonprofit organization’s event. You reimburse that volunteer for the price of the cardboard table without any paperwork to show that the money you gave that volunteer was for reimbursement.
This could muddy the waters when it comes to the difference between a volunteer and a staff member, even though you were making a good faith reimbursement. Any time that money changes hands between a nonprofit and a volunteer, you must have the volunteer sign a document that describes what the payment was for.
Rules for Volunteers: Workplace Conditions
Even though volunteers are not employees, and are not subject to the same laws and tax requirements as paid staff members, they are still entitled to safe and healthy workplace conditions. That means that if you provide an unsafe working environment for a volunteer, you can still be liable for damages as though the volunteer were an employee.
