Following my recent article on the Innate Needs of Volunteers, I received quite a few questions about how to pay volunteers, and what is accepted practice. These questions addressed topics ranging from exactly what volunteers are being paid to how they can be paid. With that in mind - and please keep in mind the fact that I am not an attorney or lawyer - I thought it might help to address some of the common questions. I will not address what programs work best in this column, but I’ll discuss some of the common solutions and pitfalls. These issues affect fire and EMS services equally, and I’ll therefore attempt to address both equally.
The majority of the questions I have received on this topic began coming in when we started paying volunteers. The first question to address is, “When is a volunteer truly a volunteer?” While we may consider all of our members to be volunteers, the government does not agree completely. The IAFC recently asked the U.S. Department of Labor for their guidance on how volunteering is impacted by the Fair Labor Standards Act (FLSA). The FLSA specifies minimum wage and overtime requirements for employees, and this letter addressed some great questions posed by the IAFC as to the requirements in volunteer situations.
The US DOL opinion letter interprets the existing statutes and gives us guidelines for paying volunteers. It’s full of great information, particularly for those of us who enjoy reading legalese. When I was looking for the answer to your questions about paying volunteers, I consulted the DOL letter, and so should you if you’re interested in a thorough background on the issue.
In answering the question of when a volunteer is truly a volunteer, the letter clearly states that to consider an individual a volunteer, they need to meet the following criteria:
- Performs hours of service for a public agency for civic, charitable or humanitarian reasons, without promise, expectation or receipt of compensation for services rendered. Although a volunteer can receive no compensation, a volunteer can be paid expenses, reasonable benefits, or a nominal fee to perform such services;
- Offers services freely and without pressure or coercion, direct or implied, from an employer; and
- Is not otherwise employed by the same public agency to perform the same type of services as those for which the individual proposes to volunteer.
Even after reading read the entire letter multiple times, as well as speaking with lawyers, I ended up with more questions then answers.
The next question is, “Can I pay my volunteers?” The answer in the government’s eyes is “yes”, as long as it is only to cover expenses, reasonable benefits or a nominal fee. Expenses are easily accounted for and reimbursed. This includes reimbursement for dry cleaning, equipment, uniforms or out of pocket expenses, a process many of us are used to with our day jobs. Harder to define are what constitutes reasonable benefits or a nominal fee.
The US DOL letter states that there are no specific guidelines on what amount is “nominal”, but that it “depends on the economic realities of the situation and that no guidelines on specific amounts applicable to all (or even most) possible situations can be provided.” While the US DOL does not have an exact definition of nominal, they do state that if the fee is not nominal, then the volunteer is considered an employee. If it sounds confusing, that’s because it is.
The opinion letter does attempt to give us some guidance to determining whether or not our payment of volunteers is a nominal fee. The key factor includes whether or not the fee paid is “analogous to a payment for services or recompense,” which would not be considered nominal. The letter does state that pay-per-call programs “may be acceptable as long as they may fairly be characterized as tied to the volunteer’s sacrifice rather than productivity-based compensation.” The only hard and fast rule for the nominal fee, which you may have seen labeled as the “bright line test,” is that the fee must “not exceed 20 percent of what the public agency would otherwise pay.”
The IAFC did a great job in creating its request for the US DOL’s opinion, outlining a variety of situations in which volunteers are paid. Whether the volunteers were paid by stipend, pay-per-call, health insurance or tax abatement, it all came back to whether or not the amount was nominal and passed the bright line test. The bottom line for us is that we CAN pay our volunteers for their sacrifice, including calls, meetings and training - as long as it is nominal. Yearly stipends and tax abatements tend to be in the $500-$5,000 range, well within what could be considered nominal. The IAFC did provide an example of a $15,000 annual fee paid to volunteers that drew scrutiny from US DOL due to local economical conditions.
The pay-per-call model may cause a few more problems. As I responded to an EMS call this week as a volunteer EMT, I started to compare a local department’s $100 per call stipend with my part-time work as a paid paramedic. Paramedics in the area make around $20 per hour, and with an average transport time of 30 minutes, an average call - including paperwork - should take no more than two hours. This means that the pay-per-call stipend more than doubles the amount a public agency would otherwise pay, and therefore is not nominal.
Another way to look at it would be to examine what the cost would be to staff a service 24 hours a day and then take 20% of that cost. EMTs in the area make around $12/hour, which multiplied by 24 hours equals $288 plus fringe benefits and overtime. If it were a slow service, responding to one call per day, the nominal cost for one day would be $57.60. Therefore, the $100 stipend well exceeds the US DOL standard and, therefore, the volunteer is an employee and is under all FLSA and local employee provisions. The nominal fee may work with $5 pay-per-call programs, but we all need to watch as the fee grows.
The second step of determining if someone is a volunteer is whether or not they work for the same organization they volunteer for, doing a similar job. The quick answer is that you can’t work for a fire or EMS organization during the day and volunteer at the same organization at night. This does not preclude one from volunteering as a firefighter or EMT if their primary job is as a firefighter or EMT - only if it is for the same organization. It gets stickier when someone works for a municipality and then volunteers for a department in that municipality.
The US DOL letter provides two examples of this that occur in many volunteer departments. The first is simple, specifying that “an individual employed as a fire marshal cannot volunteer as a firefighter for the same employer.” It goes on to state that “the government of a political subdivision, e.g., county, city, etc., with all of its departments and agencies, constitutes a single employer.” With this in mind, some of us may have to look at the volunteers we have that also work for our locality.
Another rather shocking example is the town mechanic who is allowed to respond to volunteer calls during work hours. If the town does not require him to take personal time while volunteering, he is essentially employed “as both a full-time mechanic and as a part-time firefighter.” This means he CANNOT volunteer during his off time. Any hours he volunteers would have to be counted towards his hourly wage and overtime. These town examples have the potential to hurt volunteer departments across the country that rely on town or county employees to volunteer during the day.
The question of when a volunteer is a volunteer may seem straightforward, but obviously we need to look deeper. Another common question is whether or not volunteers need to pay taxes on their stipends. While you need to look at your state statutes to be sure, the general rule is that unless it is directly a reimbursement for expenses, it is taxable as income. If we are going to be volunteer professionals, we need to hold ourselves to high standards. This includes meeting all federal regulations.
Be sure to contact your local lawyer and/or accountant for clarification as this article is not legal advice and is intended to only inform you and your department of potential areas of concern.