Nonprofits often rely on volunteers to advance their mission. While volunteer support is both valuable and lawful, nonprofits are not exempt from employment laws. Worker classification remains a critical legal issue.

Under federal and California law, only nonprofit organizations may use true, uncompensated volunteers. For-profit businesses cannot. Even for nonprofits, however, simply calling someone a “volunteer” does not make it so.

If an individual receives compensation, stipends, free services, or other benefits that resemble wages, the relationship may be reclassified as employment. Likewise, if a person performs the same duties as paid staff or works under significant control and supervision, the risk of misclassification increases.

Misclassification can expose a nonprofit to wage and hour claims, tax liabilities, penalties, and insurance coverage issues.

Why Written Volunteer Agreements Matter

A written volunteer agreement helps document the parties’ understanding that:

• The individual is offering services freely and without expectation of compensation
• The role is charitable in nature
• No employment relationship is intended
• The volunteer is not eligible for wages or benefits

While an agreement alone will not override the facts of the relationship, it provides important evidence of intent and structure.

Practical Steps for Nonprofits

Best practices for nonprofits is to:

• Clearly define volunteer roles and duties
• Avoid paying stipends that resemble wages
• Maintain separate structures for volunteers and employees
• Document volunteer status in writing
• Periodically review roles to ensure compliance

Volunteer programs are an important part of nonprofit operations. However, careful documentation and thoughtful structure are essential to avoid unintended employment liability.

If your organization relies on volunteers, reviewing your classification practices and written agreements can help reduce risk and protect your mission. Contact us to review your classification and documentation practices.

Relying on volunteers? Make sure you’re protected.
Contact Chase Law Group.

WWW.CHASELAWMB.COM
310-545-7700

_{Please note that this article is for informational purposes only and should not be considered legal advice and does constitute an attorney-client relationship. It is recommended to consult with an attorney directly for specific guidance pertaining to your business and its practices.}