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March 26, 2003

New Jersey Law Journal

Maurice W. McLaughlin

When Is a Volunteer Not a Volunteer?
An individual may not be a volunteer and a paid employee at the same job for the same public agency

Many volunteers are also employed as public servants in the communities they serve. When these employees work more than 40 hours per week, the problem arises: Are they working or are they volunteering

In government, as elsewhere, money is a problem. Elected officials are reluctant to raise taxes and seek to contain costs. Many smaller communities have therefore turned to volunteers to provide their emergency services, such as fire and first aid.

However, volunteers also must work, usually during the day. As a result, many communities have difficulty finding sufficient volunteers to provide emergency services during normal business hours.

Thus, many communities that use volunteers have been forced to hire paid employees to fill their weekday business hour shifts. This produces no conflict as long as the employees are paid for all the hours they work.

Unfortunately, however, these public servants often receive low salaries. Therefore, it is often only the most public-minded persons who fill these jobs -- exactly the type of persons who volunteer. As a result, many organizations treat the same persons as employees for their shifts up to 40 hours per week, and as volunteers for all time after that.

Therein lies the problem -- a person cannot be a volunteer and an employee for the same public employer.

Fictional firefighter Jane Smith of Jonesville, New Jersey, works Monday through Friday, 9:00 a.m. until 5:00 p.m., for the Jonesville Volunteer Fire Department. During this time she is paid $15 per hour, and her employer thus meets the minimum wage requirements during her 40 paid hours per week.

She is also a member of the Jonesville Volunteer Fire Department. All members are required to work one overnight, unpaid volunteer shift, from 5:00 p.m. until 9:00 a.m. the next day.

Additionally, if a call for a fire came in before the end of Jane's daytime shift, say at 4:30 p.m., and extended beyond 5:00 p.m., she would be treated as a volunteer after 5:00 p.m. and not paid, even though she was still on the same call. Thus she would be paid for part of the same call and not paid for part.

In short, no matter how many hours Jane functions as a firefighter for Jonesville, she doesn't get paid for more than 40 hours per week.

Employees Must Be Paid

The Fair Labor Standards Act requires employers to pay nonexempt employees. It provides both minimum wage and overtime requirements. See 28 U.S.C.S. §§ 206, 207(a)(1).

For the purposes of discussion, let's assume that the employer meets the minimum wage requirements during 40 paid hours per week, but pays the worker nothing after 40 hours, claiming that thereafter she is a volunteer.

The FLSA requires employers to pay nonexempt employees time and a half after 40 hours per week.

The FLSA provides that:

no employer shall employ any of its employees . . . for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the [forty hours] at a rate not less than one and one-half times the regular rate at which he is employed.

The FLSA applies to federal employees, with certain exceptions. The Eleventh Amendment bars suits against states for violation of the FLSA, unless the particular state has waived its sovereign immunity.

However, this immunity applies only to state governments and not their subdivisions. Thus lesser governmental entities, such as counties, municipalities or interstate governmental agencies, must follow the requirements of the FLSA. See Alden v. Maine, 527 U.S. 706 (1999), and 28 U.S.C.S. §203(e)(2)(C).

The FLSA provides for a two-tiered limitation period. "Willful" violations are afforded a 3-year limitation period, while all others receive only two years. 29 U.S.C.S. § 255(a). See also McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988).

The FLSA provides that an individual is a volunteer of a public entity if:

  1. the individual receives no compensation or is paid expenses, reasonable benefits, or a nominal fee to perform the services for which the individual volunteered; and
  2. such services are not the same type of services which the individual is employed to perform for such public agency.

Thus, an individual may not be a volunteer and a paid employee at the same job for the same public agency.

This provision was "enacted for purposes of preventing manipulation or abuse of federal minimum wage, overtime and record keeping requirements." Harris v. Mecosta County, 1996 WL 343336, *3 (W.D. Mich. 1996). Indeed, regardless of whether the employee wants to volunteer his services for the same type of job for the same public employer, he may not, since this would provide an opportunity for manipulation by the employer. Krause v. Cherry Hill Fire Dist. 13, 969 F.Supp. 270, 278 (D.N.J. 1997).

The Department of Labor's regulations include an example, explaining that a paid firefighter cannot volunteer as a firefighter for the same public agency. 29 C.F.R. § 553.103(b).

Indeed, if the employer knows that its employees are working such overtime, even without its approval, it "cannot stand idly by." It must either pay the employees or prevent the work from being done. Karr v. Beaumont, Texas, 950 F.Supp. 1317, 1323 (E.D. Tex. 1997).

This test thus has two inquiries. First, are the paid and unpaid duties the same? Second, are the employers the same?

For example, a person may perform paid firefighting duties for the same entity for which she serves as a volunteer medic. The employer is the same, but the duties are clearly different. Benshoff v. City of Virginia Beach, 9 F. Supp. 2d 610, 618 (E.D. Va. 1998).

Thus, the question of whether or not the duties are the same is ordinarily a straightforward, fact-based inquiry.

Not the Same Public Entity

Once we have determined that our employee Jane is doing the same job, however, the question becomes whether she is working for the same employer.

In many communities, emergency services are provided by nonprofit entities that are usually incorporated. These entities often receive most or all their funding from the municipal government, supplemented by some private donations. The reasons for this are normally wholly legitimate. Towns limit their liability and payroll costs. Since volunteers handle the paperwork, the town's administrative costs are also reduced.

The organization is run by the actual persons who do the emergency service work and have greater experience, knowledge and training in this area than the local elected officials. The emergency workers who volunteer their time have greater control and flexibility over how that time is spent. A forum is provided for civic-minded residents.

However, in some cases both entities -- the emergency service corporation and the municipal government -- have used this arrangement in an attempt to circumvent the overtime requirement. For example, Jonesville might say that Jane is the township's employee from 9 to 5, and a volunteer for the Jonesville Volunteer Fire Department at all other times simply because they want to keep their budget for employee salaries low.

The critical question is thus: Who is Jane's employer?

When considering an FLSA claim, "Courts are to construe the terms of 'employee' and 'employer' expansively." The terms of the FLSA are construed liberally in favor of the employee. See Tony and Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290 (1985).

The U.S. Supreme Court has noted the "striking breadth" of the FLSA's definition of "employee," which "stretches the meaning of 'employee' to cover some parties who might not qualify as such under a strict application of traditional agency law principles." Indeed, it noted that it was Congress' intent "that the term 'employee' had been given 'the broadest definition that has ever been included in any one act.'" See Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992) and 81 Cong.Rec. 7657 (1935).

The "Control" Test

Since it is asserted that Jane is a volunteer for the Fire Department, Jonesville must assert that she is the township's employee when she is paid, otherwise Jane would obviously be both an employee and volunteer for the same agency.

However, the employer's assertion of who is the employer of the employee is not dispositive. Rather, the courts will evaluate the relationship based on objective criteria, primarily using the "control test."

As the court stated in Aetna Ins. v. Transamerica Trucking Service, Inc., 261 N.J. Super. 316 (App. Div. 1993), "The element of control is generally an important -- even the most important -- determinant." As the Restatement of Agency aptly defines it, "a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control." Restatement (Second) of Agency, § 220.

In Falk v. Brennan, 414 U.S. 190 (1973), the U. S. Supreme Court noted that an employee may have two employers under the FLSA, these being the employers who had "substantial control" of the employees. And although Jonesville may pay Jane's salary, the method of payment carries "little weight." Swilling v. Mahendroo, 262 N.J. Super. 170 (App. Div. 1993).

Factors reviewed include "the employer's right to control the means and manner of the worker's performance"; "who furnishes the equipment and workplace"; the kind of occupation, in other words, whether the work is "supervised, and by whom"; "the length of time in which the individual has worked" for the employer; "whether the work is an integral part of the business of the 'employer'"; the training or skill involved; and whether the person providing the services assumed a risk of loss. See Pukowsky v. Caruso, 312 N.J. Super. 171 (App. Div. 1998) and Arthur v. St. Peter's Hospital, 169 N.J. Super. 573 (Law Div. 1979).

The doctrine of respondeat superior is also an important factor. Would the particular employer be liable for Jane's acts were she, for example, to get in an accident while driving one of the fire trucks? New Jersey Property-Liability Ins. Guaranty Ass'n v. State, 195 N.J. Super. 4 (App. Div. 1984).

In addition to looking at who made hiring and firing decisions, a reviewing court would look to see, among other things, whether:

  • Jane's supervisors were township or Fire Department employees;
  • Jane rode the same trucks as a paid employee and volunteer;
  • Jane wore the same uniform as a paid employee and volunteer;
  • Jane used the same tools as a paid employee and volunteer;
  • Jane reported to the same workplace as a paid employee and volunteer;
  • the same entity determines Jane's hours as an employee and volunteer;
  • the same entity determines Jane's duties as an employee and volunteer;
  • the same entity determines the training required for Jane's duties as an employee and volunteer; and
  • liability for Jane's acts would be borne by the same entity.

Nature of Work

In the event a determination cannot be made under the control test, courts then look to the "relative nature of the work" test, which focuses on the "functional integration of their respective operations." In other words, as the Aetna court noted, the relative nature of the work is tested by whether the employees' work is "an integral part of the employer's business and whether the worker furnishes independent business or professional service."

Under this test, therefore, a court would look to see:

  • how the township has chosen to provide for emergency services -- if Jonesville has no Fire Department, and firefighting is done solely by the Volunteer Fire Department;
  • whether paid employees are assigned to the township's Fire Department or any other department in Jonesville's governmental organization;
  • whether the training required for paid employees and volunteers is the same; and
  • whether paid employees and volunteers perform the same services.

"Borrowed Servant" Doctrine

In the event that both the control test and the relative nature of the work test fail to yield a dispositive result, New Jersey courts also looks to the borrowed servant doctrine.

A person may be a "servant serving two masters," where the same organization is responsible for the "direct supervision and control" of the paid employees and volunteers. Pelliccioni v. Schuyler Packing Co., 140 N.J. Super. 190 (App. Div. 1976). And as the Appellate Division held in New Jersey Property-Liability Ins., "control by the master over the servant is the essence of the master-servant relationship on which the doctrine of respondeat superior is based."

The fact that Jane undisputedly does her volunteer work for the Fire Department but is paid by the township does not prevent her from being an employee of both.

In Communications Workers of Americas v. Atlantic County Ass'n for Retarded Citizens, 250 N.J. Super. 403 (Ch. Div. 1991), the court stated that "[W]hen two or more employers exert significant control over the same employees, that is, where they share in the determination of matters governing central terms and conditions of employment," or where there is "intermingling of the employees' duties" between two employers, then the two employers are considered "joint employers."

The question of joint control is a factual determination.

The Chief Needs Help

What is a poor town to do?

Clearly, Jonesville's Fire Department chief cannot have her volunteers serving as paid employees, and vice versa. This means that her paid crew must be composed of different persons than the department's paid employees. It also means that when the paid employees work past their regular shift, they must be paid -- and they must be paid overtime after 40 hours.

Initially, the chief was upset. She had hired volunteers to fill the township's daytime needs for fire protection and also to allow her volunteers to make some money. Now she cannot do this, and no one she knew who needed the work could afford to take the training to be a volunteer fireman and a paid medic.

However, the chief thought about it and called her friend, the chief of the Volunteer Fire Department of Doeville, which borders Jonesville. Doeville was having the same problem.

The chiefs put their heads together and came up with a solution: Doeville now advertises for paid employees among Jonesville's volunteers, and Jonesville advertises among Doeville's volunteers. Jonesville volunteers work during the day as paid Doeville firefighters and Doeville volunteers do the same in Jonesville.

They all get paid when extended calls run beyond their regular shifts, and they get overtime when they work beyond 40 hours per week. However, they can still serve as volunteers for their hometown fire departments if they want to do more.

But most important, there is coverage for fires and emergencies, the towns stay within their budget and no one has violated the Fair Labor Standards Act.

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