DOL OFFERS GUIDANCE ON PAYMENTS MADE TO VOLUNTEERS
Cities that use volunteers should be aware of a recent opinion letter issued by the U.S. Department of Labor (DOL) that provides guidance on how a city may pay its volunteers without jeopardizing its exempt status under the Fair Labor Standards Act (FLSA).
The FLSA provides that volunteers may not receive compensation but may be paid “expenses, reasonable benefits, or a nominal fee.” The opinion letter addressed whether certain stipends were permissible “nominal fees” (a stipend of $150 per 12-hour shift and a stipend of $19.72 per call for volunteers who respond to calls).
The DOL regulations outline the following four factors to determine whether a payment is a “nominal fee:” (1) the distance traveled; (2) the time and effort expended by the volunteer; (3) whether the volunteer has agreed to be available around the clock or only during certain specified time periods; and (4) whether the volunteer provides services as needed or throughout the year.
The letter appears to solidify a new standard for what constitutes a “nominal fee.” It provides that an employer may generally pay regular stipends to a volunteer, as long as the payment represents not more than 20 percent of what the employer would have otherwise paid a full-time worker to perform the same services. The letter also approves the practice of paying stipends on a per-shift or per-call basis, provided the payments can be fairly characterized as tied to a volunteer’s sacrifice rather than productivity.
The full text of the opinion letter can be found online at: http://www.dol.gov/esa/whd/opinion/FLSANA/2007/2007_09_17_03NA_FLSA.pdf
(Note: The opinion was not signed by the administrator of the DOL Wage and Hour Division. As such, it should be regarded as guidance only. It does not constitute a ruling or interpretation that an employer is entitled to rely on as an absolute defense in the event of a lawsuit.)