By Jerry L. Pigsley, Woods & Aitken LLP EFFECTIVE COMMUNITY ENGAGEMENT PROGRAM


Employers understand that their employees not only want to work, but they want to help their community and others. The U.S. Department of Labor Wage and Hour Division issued on March 14, 2019, a new opinion letter on whether an employee’s time spent participating in an em- ployer’s optional volunteer program, which awards a bonus to certain participating employees, is hours worked under the Fair Labor Standards Act (FLSA).


VOLUNTEER PROGRAM


Under the program, employees engage in volun- teer activities that their employer sponsors or the employees themselves select. The employer com- pensates employees for the time they spend on volunteer activities during normal working hours or when they are required to be on the employ- er’s premises. However, many of the hours that these employees spend on volunteer activities are outside of normal working hours. At the end of the year, the employer rewards the group of employ- ees with the greatest community impact with a monetary award, and the winning group’s super- visor decides how to distribute the award among the employees. The employer does not require employees to participate in the program or direct or control their participation.


FLSA PRINCIPLES


A person is ordinarily not an employee under the FLSA if the individual volunteers without con- templation or receipt of compensation. A volun- teer must offer his or her services freely without coercion or undue pressure – direct or implied – from an employer. Volunteer time is not consid- ered hours worked where the employer actively promotes participation in volunteer activities and non-participation does not adversely affect working conditions or employment prospects. A practice of compensating employees when they participate in volunteer activities during normal work hours does not jeopardize their status as volunteers when they participate in volunteer ac- tivities outside of normal work hours. 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 the time as hours worked provided: (1) volunteering is optional, (2) not volunteering will have no adverse effect on the employee’s working conditions or employment prospects, and (3) the employee is not guaranteed a bonus for volunteering.


DOL OPINION


The Department of Labor (DOL) found the employ- ee participation in this program did not count as hours worked under the FLSA since the employer did not unduly pressure its employees to partic- ipate. Employee participation in the employer’s program was found to be charitable and voluntary. The employer did not guarantee participating em- ployees a bonus for their volunteer work. Instead, the employer only rewarded the group with the most community impact and gave the winning group’s supervisor discretion to determine what amount of the bonus, if any, to award the individ- ual employees in the group. Thus, the employee’s time spent participating in the employer’s optional volunteer program, which awarded a bonus to certain participating employees, was not consid- ered hours worked under the Fair Labor Standards Act by the Wage and Hour Division of the U.S. Department of Labor. The opinion is a positive endorsement for employers who want to encourage their employees to volunteer in their community.


Editor’s Note: This article is not intended to provide legal advice to our readers. Rather, this article is intended to alert our readers to new and developing issues and to provide some common sense answers to complex legal questions. Readers are urged to consult their own legal counsel or the author of this article if the reader wishes to obtain a specific legal opin- ion regarding how these legal standards may apply to their particular circumstances. The author of this article, Jerry L. Pigsley, can be contacted at (402) 437-8500, jpigsley@woodsaitken.com or at Woods & Aitken LLP, 301 S. 13th Lincoln, NE 68508-2578.


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32 | The Retailer Magazine | May/June


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