Awarding Bonuses Does Not Make Volunteering Time Compensable Under FLSA, DOL Says
Author: Michael Cardman, XpertHR Legal Editor
March 15, 2019
Awarding bonuses to certain employees who participate in an optional volunteer program does not mean that an employer must pay them for the time they spend volunteering, according to a new opinion letter from the US Department of Labor (DOL).
The employer that requested the opinion letter runs an optional community service program, in which employees volunteer in activities that either the employer sponsors or the employees themselves select. The employer pays employees for the time they spend in volunteer activities during working hours or while they are required to be on the employer's premises; however, many of the hours that the employees spend on volunteer activities are outside normal working hours.
At the end of the year, the employer rewards the group of employees with the greatest community impact with a monetary award. The employer does not require employees to participate in the program or direct or control their participation.
In opining that participation in this program does not count as hours worked for which employees must be paid under the Fair Labor Standards Act (FLSA), the DOL cited two of its previous opinion letters:
- A 2005 opinion that an employer may notify employees of volunteer activities and ask for assistance with them as long as there are "no ramifications if an employee chooses not to participate"; and
- A 2006 opinion that an employer may use an employee's time spent volunteering as a factor in calculating whether to pay the employee a bonus, without incurring an obligation to treat that time as hours worked, as long as:
- Volunteering is optional;
- Not volunteering will have no adverse effect on the employee's working conditions or employment prospects; and
- The employee is not guaranteed a bonus for volunteering.
An opinion letter is an official, written opinion from the DOL's Wage and Hour Division (WHD) describing how a particular law applies to specific circumstances. If an employer requests an opinion letter from the WHD, provides it with all the pertinent facts regarding its particular situation, receives an opinion letter from the WHD and then follows the opinion letter in good faith, it will be shielded from liability for any minimum wage and/or overtime violations involving the practices described in its letter.
Even if they had not requested an opinion letter themselves, other employers that have identical fact patterns also can be shielded from liability if they follow an opinion letter. However, an employer should exercise caution before relying on another employer's opinion letter because any variation in the fact pattern can nullify its defense.