Thursday, September 25, 2014

Volunteers in the Public Sector

In 2008 the U.S. Department of Labor issued new guidance on the use of unpaid interns in the private sector.  The guidance provided a six part test to determine whether or not the internship qualifies as an educational exception to the wage payment laws.  Failing the six part test causes an internship to be subject to pay for time spent in the program.

Many public employers have raised concerns regarding the continued use of unpaid interns or volunteers in the public sector.  A recent case from the United States Second Circuit Court of Appeals provides guidance and reassurance for public employers.

In Brown v. New York City Department of Education No. 13-139-cv decided June 18, 2014 the court applied the public sector volunteer exemption in the Fair Labor Standards Act to award summary judgment to New York City and deny an intern’s claim for pay under the Act.

Mr. Brown, a recent high school graduate, worked for three years as a volunteer at a New York City high school.  He generally worked five days per week, forty hours per week, and also assisted on Saturday and in the summer.  The principal occasionally gave Mr. Brown money for transportation, meals, and other purposes because he was doing a “great job.”  The principal also applied for a grant to pay Mr. Brown, but no grant was ever received.  Mr. Brown was told he was considered a volunteer and would not be paid for his services.

The Court applied the four part test found in DOL regulations regarding public volunteers ( 29 C.F.R. 553.101(a),(c), (d).)  Citing to legislative history regarding the statutory volunteer exemption in the FLSA, the court distinguished public volunteers from volunteers for private companies.  Congress in 1985 amended the FLSA to provide a “volunteer exemption” to the wage payment law (29 U.S.C. 203(e)(4)(A).)

Persons performing services for a public agency must:  1. Have a civic, charitable, or humanitarian purpose, 2. Have not been promised or expect to receive compensation for the services rendered, 3. Perform such work freely and without pressure or coercion, direct or implied, from the employer, and 4. Not be otherwise employed by the same public agency to perform the same type of services as those for which the individual proposes to volunteer.

The Court found that volunteering in the school was a civic purpose, even though Mr. Brown volunteered in part to build his own resume.  The Court also found that although Mr. Brown wanted to get paid, he had no objectively reasonable expectation that he would be paid.  Further, the nominal sums paid to Mr. Brown were specifically allowed under the Act as paid expenses and were not tied to his performance or hours worked.  Finally Mr. Brown was not coerced into volunteering.  The fact that he rarely missed any school days showed a conscientious volunteer not a coerced volunteer.

Public employers using unpaid interns should document the voluntary nature of the internship, addressing the four factors used by the Department of Labor in applying the FLSA volunteer exemption.  Additionally employers should be careful to not coerce volunteers to work, and not reward volunteers with gifts or compensation based on time worked or goals met.  Cash payments should be nominal and designed to pay for expenses incurred by the volunteer such as transportation and meals.