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Utilizing Volunteers and Interns

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Utilizing Volunteers and Interns

This article was authored by Tracey Bolotnick, an Attorney at Hurwit & Associates with extensive experience advising exempt organizations on employment matters. She can be contacted at (617) 630-6900 or tbolotnick@hurwitassociates.com for further information.

Unlike most people in the workforce, interns (of either businesses or nonprofit organizations) and volunteers (of nonprofit organizations) are not required to be paid for the time they spend working. Interns and volunteers are exempt from wage requirements. In the case of interns, the presumption is that compensation is provided in the form of valuable practical training. Volunteers are exempt from wage requirements in recognition of the social value of individuals giving their time freely to benefit society as a whole. Accordingly, any company may engage interns, but only nonprofit and social welfare organizations may enlist the help of volunteers. Nevertheless, employers must ensure that certain specific requirements are met in order to properly utilize the time and efforts of interns and volunteers on an unpaid basis.

Rules for Use of Interns

The Fair Labor Standards Act provides that workers may be engaged as unpaid interns only if the following are true:

  1. The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction;
  2. The training is for the benefit of the trainees;
  3. The trainees do not displace regular employees, but work under their close observation;
  4. The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer's operations may actually be impeded;
  5. The trainees are not necessarily entitled to a job at the conclusion of the training period; and
  6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

If even one of these criteria is missing, a worker cannot be classified as an "intern." Nonprofit organizations often wish to engage interns at different levels within the organization, from stuffing envelopes to conducting sophisticated research. But because such activities may be designed primarily to benefit the nonprofit organization rather than to educate the intern, requirement number 4 above is often difficult to meet. For this reason, it may be preferable to characterize unpaid workers as volunteers.

Rules for Use of Volunteers

The following factors are taken into consideration in determining whether a worker may qualify as a volunteer:

  • Nature of the entity receiving the services (nonprofit better than for-profit)
  • Compensation of any sort, such as money, room & board, perks, etc. (best if no compensation)
  • Expectations of benefits in the future (best if no expectation)
  • Whether the activity is less than a full-time occupation (part-time better than full-time)
  • Whether regular employees are displaced (best if no regular employee is displaced)
  • Whether the services are offered freely without pressure or coercion (best if freely offered), and
  • Whether the services are of the kind typically associated with volunteer work.

Although nonprofits may offer volunteers a stipend in exchange for their work, caution is advised in determining how much to offer to avoid inadvertently causing the worker to be considered an employee. This is because pay that is tied to productivity or to the amount of time spent working may be considered indicative of an employment relationship, as is anything more than "nominal" compensation.

Nonprofit organizations may wish to take advantage of their ability to use unpaid workers to further their missions, but in doing so should take care to ensure that such workers are appropriately characterized. It is recommended that nonprofits use written agreements when engaging volunteers to make sure there is no mistake about expectations, as well as for liability protection.