DOL Addresses Volunteer Work by Non-Profit Exempt Employees

Last month, the federal Department of Labor issued an Opinion Letter 2026-12 addressing when non-profit employees can volunteer for their employer without additional compensation.  The DOL has long taken the position that employees may not volunteer without expectation of compensation to perform duties that are the same or similar to their regular compensable work.  In addition, if an exempt employee volunteers similar work, the employer must be careful that the employee’s primary duty remains exempt work or those employees would be entitled to additional compensation.   This particular work involved socializing puppies at home to become service animals.  The duties of office workers and veterinarians were dissimilar enough from the tasks of socializing puppies at home and, thus, could be voluntary.  However, the compensable duties of exempt dog trainers were too similar to be volunteer work.  Further analysis would be required to determine whether raising puppies changed the primary duty of their exempt position.  “If the employee remains exempt under the applicable duty and salary tests, the employee’s salary could serve as compensation for any hours spent raising puppies at home, and no additional compensation would be required.”  This is because, “an employee who is exempt from the minimum wage and overtime requirements under section 13(a)(1) may perform additional juvenile canine socialization work without additional compensation if the employee’s primary duty remains the performance of exempt work and the employee continues to satisfy the salary requirements for the exemption.”

The DOL has long applied by analogy FLSA regulations applying to government work to non-profit agencies.

[A]n employment relationship does not exist when a public sector [i.e., government] employee volunteers to perform services to the employing public agency, so long as the individual receives no compensation to perform the volunteer services,3 and such services are not the same type of services for which the individual is employed to perform for the public agency. 29 U.S.C. § 203(e)(4)(A). In addition, the Division’s regulations clarify that individuals are volunteers “only where their services are offered freely and without pressure or coercion, direct or implied, from an employer.” 29 C.F.R. § 553.101(c). . . .

Although the FLSA does not include a similar express provision for private, nonprofit employers, the Division has consistently applied the same requirements to employees of religious, charitable, or nonprofit organizations who volunteer their services to their employing organization for civic, charitable, or humanitarian reasons. . . .

Accordingly, an employee of a nonprofit organization may, freely and without coercion from the employer or its agents, volunteer to perform work that is neither the same nor of similar type as the work that the employee is employed to perform. Put another way, a nonprofit employee cannot be both a paid employee and a non-paid volunteer while performing the same type of work for the same employer  … . .When a nonprofit employee volunteers to do the same type of work that the employee is employed to perform, the Division has long considered that volunteer work an indivisible part of the employment relationship for FLSA purposes, and, as such, it may constitute hours worked.  . . . Additionally, employees cannot agree, or be required to “agree,” to waive their rights to compensation under the FLSA under the guise of volunteering.

If an exempt employee volunteers to perform work that is the same or similar to his or her regular duties, the employer need not necessarily pay extra salary or compensation unless the amount of so-called volunteer work involves non-exempt aspects of the employee’s job and the employee’s primary duties are no longer exempt duties.

An employee’s exemption status can become relevant, however, if the “volunteer” work does not satisfy the conditions for volunteering required by the Act and explained in the Division’s regulations, including, for example, if the volunteer duties are of the same or similar type as those the employee is employed to perform, and thus are part of the employment relationship. In those circumstances, for a non-exempt employee, the employer must pay for all combined hours worked, including any “volunteer” hours, pursuant to the Act.

In analyzing job duties in comparison to the tasks of raising puppies at home, the DOL concluded that exempt veterinarian and office workers could volunteer to raise puppies, but exempt dog trainers could not volunteer without further analysis of how the non-exempt work of raising puppies affected their primary duty test.

Based on a general understanding of the work that veterinarians typically perform, we assume for the purposes of this letter that the veterinarians’ duties involve providing medical care to the canines, such as diagnosing and treating sick or injured dogs, and do not include providing non medical care to, training, or socializing juvenile canines. Likewise, we assume for the purposes of this letter that the directors’ duties involve supervising employees and do not include directly caring for, training, socializing, or otherwise interacting with the juvenile canines. As such, the veterinarians’ and directors’ duties would be sufficiently different from the routine care, socialization, and early training involved in raising juvenile canines, and veterinarians and directors could volunteer to provide these services in their homes . . .  

The result is different for trainers. As discussed above, juvenile canine socialization includes not only routine care but also training. If the nonprofit employs trainers to provide specialized training for canines, as your letter implies, or to care for or socialize the canines, those duties would likely be the same or sufficiently similar to the services performed by juvenile canine caretakers, such that the trainers may not volunteer for your organization to care for or train canines at home.  . . .  This is true regardless whether the employee also performs other work, including exempt work, or whether the employee’s primary duty for purposes of the section 13(a)(1) exemption is caring for or training canines.

For veterinarians and directors whose job duties differ sufficiently from those involved in juvenile canine socialization, the time the employee spends as a volunteer juvenile canine caretaker would not be part of the employee’s employment relationship with your organization for FLSA purposes. In contrast, if the services you employ the employee to perform involve the same or similar type of activities as those involved in juvenile canine socialization, the volunteer hours are part of the employment relationship and must be counted as hours worked for FLSA purposes as long as they qualify as compensable worktime under the FLSA.. . .

Because the volunteer work (which is sufficiently dissimilar from regular job duties) is not considered to be work under the FLSA, no further analysis is required to determine whether the employee’s exempt status is affected.  However, for the exempt dog trainers, further analysis would be required to determine whether raising puppies at home would change the primary duty of their position and affect their exempt status. “If the employee remains exempt under the applicable duty and salary tests, the employee’s salary could serve as compensation for any hours spent raising puppies at home, and no additional compensation would be required.”

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

A Flurry of FLSA Activity

If you blinked this week, you will have missed an unusual amount of activity concerning the Fair Labor Standards Act.  First, there were two Administrator Opinion Letters.  Opinion Letter 2018-19 provided that employers are not required to compensate employees for frequent short rest breaks that are required by the employees’ medical condition and covered as intermittent leave under the FMLA, except to the extent that other employees are provided to paid rest breaks.  Opinion Letter 2018-18 discussed the non-compensability of travel time an employee spends outside of his or her regular working hours and to commute to and from home to a job site or regular work location.    Yesterday, a unanimous Sixth Circuit reversed a trial court judgement and admonished the DOL for prosecuting a church for spiritually coercing its members during Sunday sermons to volunteer without any expectation of compensation in the church’s for-profit restaurant side-by-side with paid staff.  Finally, ten days ago, the DOL issued brief enforcement guidance to its staff in Field Assistance Bulletin 2018-3 about how it will interpret the recent FLSA amendments concerning tip pooling until formal regulations are issued and to terminate its temporary non-enforcement period of the tip-pooling rules.

Opinion Letter on Medical Accommodation Rest Breaks. Last Thursday, the DOL issued Administrator Opinion Letter 2018-19 recognizing an exception to the general rule that short rest breaks (of under 20 minutes) are generally considered to be compensable time when those rest breaks are frequent, are covered by the FMLA and, thus, primarily benefit the employee instead of the employer.   As most employers know, short rest breaks (of up to 20 minutes in duration) are generally considered to be too short to give the employee an opportunity to use the time for his or her own benefit, and thus, those breaks primarily benefit the employer by keeping the employee’s mind and body fresh for work.  Thus, is it common for employers to provide for a couple of paid rest breaks during an 8-hour shift.   In the Opinion Letter, however, the employer asked about a non-exempt employee whose physician certified that the employee needed to have a fifteen minute rest break every hour.  This meant that the employee only worked 6 hours out of an 8-hour shift.   Based on a prior court opinion, the Acting Administrator concluded that the frequency of the accommodation rest breaks primarily benefitted the employee and not the employer.  Further, the FMLA provides that FMLA intermittent leave – which would cover such frequent rest breaks necessitated by a serious medical condition – need not be paid.   Accordingly, where an employee’s medical condition requires frequent short rest breaks, the employer need not compensate the employee for those rest breaks except to the extent that other employees are compensated for short rest breaks.   Thus, when an employer provides each employee two short paid rest breaks per shift, but the employee requires 7 short rest breaks per shift, the employer need not pay for five of those rest breaks.  What is left for interpretation and handwringing by employers and employees, however, is whether there is a clear dividing line between when frequency of the rest break breaks stop being for the primary benefit of the employer and become for primarily for the accommodation benefit of the employee.   The “primary benefit” analysis should also apply whether or not the employer is governed by the FMLA, but one can probably expect that to be litigated, as well as claims that other employees are provided with more than two paid rest breaks per day, etc.

Spiritual Coercion is Not Economic Coercion.  A northeast Ohio church operated a wholly-owned, but separately incorporated, for-profit restaurant in its community which employed and paid thirty-five individuals.  Accosta v. Cathedral Buffet, Inc., No. 17-3427 (4-16-18).   The church also pressured its members to volunteer at the restaurant (which never turned a profit and was substantially subsidized by the church) and to preach the good news to the restaurant’s patrons.   It was stipulated that not a single volunteer expected any form of compensation or was in any way economically dependent upon the church or restaurant. “Put simply, there was no economic relationship between the restaurant and the church member volunteers.“  The DOL prosecuted the restaurant for failing to maintain records of working hours or minimum wages paid to the volunteers and obtained a judgment in federal court of $388,508 in back pay and liquidated damages.  This forced the restaurant to close, laying off all of its 35 employees.  The church appealed and the Sixth Circuit reversed.   Adults who volunteer without any expectation of any sort of economic compensation are not employees under the FLSA and are not required to be paid any compensation. 

The Supreme Court held as much in Portland Terminal when it defined a volunteer as a “person who, without promise or expectation of compensation, but solely for his personal purpose or pleasure, worked in activities carried on by other persons either for their pleasure or profit.”  Portland Terminal, 330 U.S. at 152 (emphasis added).  The Alamo Court reiterated this test, making clear that when a religious organization undertakes a commercial endeavor, its workers are only covered under the FLSA if they “engage in those activities in expectation of compensation.”  Alamo, 471 U.S. at 302.

Further, the Court rejected the DOL argument that spiritual coercion could be substituted for the lack of compensation expectation and found that the FLSA only covered economic coercion, not spiritual admonishment or coercion.  Thus, it did not matter if the church members were afraid of going to hell if they failed to volunteer.

But although the FLSA might aim to curb the societal ills caused by low wages, it does so through a comprehensive system of economic regulations.  The Act does not go so far as to regulate when, where, and how a person may volunteer her time to her church.  After all, the giving of one’s time and money through religious obligation is a common tenet of many faiths.  For instance, the Bible calls upon Christians to “use whatever gift you have received to serve others, as faithful stewards of God’s grace in its various forms.”  1 Peter 4:10 (NIV).  In the Islamic faith, believers are instructed to “show kindness unto parents, and unto near kindred, and orphans, and the needy.”  The Qur’an, An-Nisa 4:36.

The Court distinguished this case from Alamo Foundation v. Secretary of Labor, where the individuals resided for long periods of time at the employer, were economically dependent on the Foundation and were compensated with clothing, room and board instead of with money.   Those individuals expected to be compensated, just not in cash, and, thus, were employees.   Further, a for-profit farm with an understanding with a church to provide “volunteer’ child labor was still covered when the children were coerced by their parents, church and community to pick nuts.

Finally, the Court rejected the DOL argument that permitting the church to use volunteer labor gave it an economic advantage over secular businesses.  Pointedly, the Court noted that the Supreme Court had specifically observed in the Alamo Foundation case that true volunteers are never covered by the FLSA even if they volunteer for a for-profit business and gave as examples:

“driv[ing] the elderly to church, serv[ing] church suppers, or help[ing] remodel a church home for the needy.”   . . .  These activities could all be seen as competing with other businesses, yet they are still exempted from FLSA coverage because the workers do not expect to receive an economic benefit in return for their service.  A church van competes with a taxi service.  A Catholic fish fry competes with a fast food restaurant.  A volunteer homebuilding project competes with a construction company.  Granted, Cathedral Buffet was organized to turn a profit (although there is little evidence that the restaurant ever generated revenue for the church).  But, as the Court made clear in Portland Terminal, what matters is not the object of the enterprise, but instead the purpose of the worker.  Portland Terminal, 330 U.S. at 152-53 (emphasis added).

The concurring opinion admonished the DOL for applying the FLSA when a “pastor spiritually ‘coerced’” his flock to volunteer and attempting to “regulate the spiritual dialogue between pastor and congregation” in violation of “the Free Exercise Clause of the First Amendment.”

One can agree that the Reverend’s comments were in poor taste, and yet see that the Department [of Labor] has no business regulating them.  For the power that the Department purports to exercise here is out of bounds even under Employment Div. v. Smith, 494 U.S. 872 (1990).  There, of course, the Court held that a neutral law of general applicability does not violate the Free Exercise Clause when the law burdens religious exercise only incidentally.   . . .  But here the Department’s actions meet none of those criteria.  The Department seeks to regulate spiritual conduct qua spiritual conduct, and to impose significant liability as a result.  The very criterion by which the Department would impose liability is expressly spiritual.  Hence this is not a case, like Smith, where illegal conduct (there, smoking peyote) remained illegal even though it was religiously motivated.  Instead, the Department’s position here is that otherwise legal conduct—such as volunteering at a church restaurant—becomes illegal if the worker’s pastor spiritually pressures her to engage in it.  (Under this regime, one supposes, whether a pastor can invoke the Book of James—“a person is justified by works and not by faith alone[,]” James 2:24—might be determined on a case-by-case basis.)  The Department’s actions therefore “target[] religious conduct for distinctive treatment[,]”  . . . and their burdens upon religious exercise would come by design.

Nor is the Department even competent to make the spiritual judgment it purported to make here.   . . . .  Hence it is beyond the ken of federal agencies, or the courts, to determine that congregants were spiritually coerced even though the congregants themselves say they were not—which is what 134 members of Grace Cathedral said under oath here.

Tip Pooling. As previously reported here, Congress amended the FLSA in March concerning the sharing of tips.   Earlier this month, the DOL issued a brief Field Assistance Bulletin to address some of the many questions left open by the statutory amendment.  The DOL indicates that it will proceed with formal APA rulemaking to replace the existing and superseded regulation.   Until that regulation is finalized, however, the DOL indicates:

employers who pay the full FLSA minimum wage are no longer prohibited from allowing employees who are not customarily and regularly tipped—such as cooks and dishwashers—to participate in tip pools.  The Act prohibits managers and supervisors from participating in tip pools, however, as the Act equates such participation with the employer’s keeping the tips.  As an enforcement policy,  WHD will use the duties test at 29 C.F.R. § 541.100(a)(2)-(4) to determine whether an employee is a manager or supervisor for purposes of section 3(m).

In addition, an employer’s administration of

a permissible tip pool does not constitute either unlawful retention of tips or unlawful tip pool participation under the Act by employers, managers, or supervisors.  Additionally, the provisions in WHD Field Operations Handbook 30d05 concerning tips charged on credit cards still apply.

Finally, the DOL announced that end of its temporary period of non-enforcement of the tip-pooling rules that has been in place since July 2017: 

WHD’s July 20, 2017 non-enforcement policy concerning retention of tips by tipped employees paid the full FLSA minimum wage will not apply to new investigations beginning on or after March 23, 2018.  When an investigation covers periods before and after March 23, 2018, and the employee was paid at least the full FLSA minimum wage, violations of section 3(m) may only be cited if they occurred after March 23, 2018.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Dismisses Title VII and §1983 Claims Brought by Volunteer Nuns

On Friday, the Sixth Circuit Court of Appeals dismissed for lack of subject matter jurisdiction Title VII religious discrimination and retaliation claims brought by two nuns who volunteered with the Red Cross and the Ross County Emergency Management Agency.   Sister Michael Marie v. American Red Cross, No. 13-4052 (6^th Cir. 11-14-14).  Similar constitutional and first amendment claims against the agency were likewise dismissed. The plaintiffs both volunteered with the Red Cross and county agency.  They alleged that the Red Cross denied them promotions to volunteer positions with higher authority and responsibility on account of their religion and terminated them in retaliation for complaining.  They allege that they were later terminated by the county agency for similar reasons and that the Red Cross Executive Director served on the Board of the agency.  They filed with the OCRC and EEOC Charges of Discrimination, which were dismissed for lack of jurisdiction since the nuns volunteered with the respondents and were not employees.  Neither plaintiff received or expected any monetary compensation for their services and did not receive any employment benefits, but were eligible for workers compensation, life insurance and travel reimbursement.  They filed suit in federal court, which dismissed the claims and was affirmed on appeal.

The Court of Appeals determined that coverage under Title VII is limited to common law employees, which depends on a number of factors, such as:

[1] the hiring party’s right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are [2] the skill required; [3] the source of the instrumentalities and tools; [4] the location of the work; [5] the duration of the relationship between the parties; [6] whether the hiring party has the right to assign additional projects to the hired party; [7] the extent of the hired party’s discretion over when and how long to work; [8] the method of payment; [9] the hired party’s role in hiring and paying assistants; [10] whether the work is part of the regular business of the hiring party; [11] whether the hiring party is in business; [12] the provision of employee benefits; [13] and the tax treatment of the hired party.

While this test is most frequently utilized to determine whether an individual is an employee or independent contractor, it can also be applied to determine whether a volunteer is a covered employee.  Unlike other circuits, the Sixth Circuit considers compensation to be just one of the relevant factors, instead of categorically more important.  The Court rejected the plaintiff’s argument that it should be of lesser importance. After noting that the plaintiffs received no compensation or employment benefits, it also noted that they largely controlled when they volunteered and how they performed.  The plaintiffs were in no way economically dependent on the defendants.  The only factors in their favor was that the plaintiffs had worked for the defendants for several years and performed services in the defendants’ core business. Nonetheless, it was debatable whether the nature of their services was like that typically performed by employees or independent contractors.

The Court also found that the plaintiffs did not show that they were retaliated against on the basis of their religious beliefs.  The agency’s executive director had been initially friendly with them, which meant that another factor must have arisen when his behavior allegedly changed years later.  The Court also concluded that they could not show denial of equal protection because they failed to identify any other volunteers who were treated differently in that they were the only two volunteers who criticized the agency’s management.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.