US DOL Issues Opinion Letter on Employer-Sponsored Community Service Program Compensation
The Wage and Hour Division of the U.S. Department of Labor (DOL) recently issued an opinion letter that addresses whether employees must be compensated for the time they spend participating in an employer-sponsored community service program outside of normal working hours. The specific program reviewed by the DOL did not require employees to participate, did not direct or control the volunteer activities and also provided a reward to the group of employees with the greatest community impact. The winning group’s supervisor then maintained the discretion on how to distribute the award/bonus to each employee in the group based on multiple factors, including, but not limited to, how many hours each employee volunteered during the year.
In reviewing the program, the DOL emphasized that the Fair Labor Standards Act (FLSA) was not designed “to discourage or impede volunteer activities.” However, the DOL warned that time spent volunteering in an employer-sponsored program may be compensable under certain circumstances. To this end, the DOL noted that it considers several factors in determining whether the time spent in an employer-sponsored volunteer program is compensable under the FLSA, including whether:
- participation in the program is required;
- the employer controls or directs the actual volunteer work;
- the employee is subject to adverse consequences by the employer for not participating in the program; or
- the employer guarantees a bonus to individual employees for participating in the program
The opinion letter also clarifies that time spent in a volunteer program is not hours worked under the FLSA so long as the employer “does not unduly pressure its employees to participate.”
Applying the above principles to the program at issue, the DOL opined that the time employees spend volunteering in the program is not compensable because participation is optional, the employer does not control the volunteer work, the employees are not subject to adverse consequences for not participating in the program and the employer merely “rewards the group with the most community impact [by providing] the winning group’s supervisor discretion to determine what amount of [a] bonus, if any, to award to individual employees in the group,” i.e., the bonus, if any, is not guaranteed.
The DOL did not address other considerations in the letter including, but not limited to, the impact of employer-sponsored volunteer programs on the tracking of hours worked by hourly employees, the calculation of overtime compensation rates for non-exempt employees, and the best practices for employers’ written policies and procedures regarding volunteer programs, including, a requirement that employees obtain pre-approval prior to performing certain volunteer activities.