Distinguishing between Employees and Volunteers

Ministries everywhere depend on volunteers. These unpaid workers often work side-by-side with ministry employees, who also may volunteer some of their time in addition to their regular work hours.

As an employer, ministries are required to properly pay employees for all time spent performing their job functions, so distinguishing between volunteer hours and employee hours is important. In order to comply with state and federal wage and hour laws, ministries also must distinguish between volunteer hours and employee hours.

The U.S. Department of Labor defines volunteers as “individuals who volunteer or donate their services, usually on a part-time basis, for public service, religious, or humanitarian objectives, not as employees, and without contemplation of pay.” An employee, then, is an individual who performs work at the request and direction of the ministry and expects to be paid.

Employees Who Volunteer Time

Perhaps the most important—and complex—factor in distinguishing between employee and volunteer work is determining if some of an employee’s time performing work on behalf of the ministry can be considered volunteer hours for which no compensation is paid.

For example, federal wage and hour laws generally require that an employed church secretary who also does 'voluntary' secretarial duties on a Sunday be compensated at the same (or perhaps overtime) rate she is paid for her work during the week. Whenever volunteer work is substantially similar to work done for pay, the work performed should be included in the calculation of the employee’s weekly paid hours.

However, when the volunteer work is substantially different from work done for pay, occurs outside of normal working hours, and is not performed at the direction of the employer, an employer will not typically be required to pay the employee for such work. Ministries will most often run into this issue with employees who are classified as non-exempt and are paid an hourly rate.

Consider the same church secretary mentioned above. If she volunteered to help prepare or serve at a church fellowship dinner, or participate in a church-sponsored community care day, her volunteer time for these activities would not have to be included in her paid weekly hours. Her volunteer work in these cases is considerably different than the ongoing secretarial duties for which she is paid.

Exempt employees are different. Time that exempt ministry employees spend volunteering, even if the volunteer activity is similar to their job responsibilities, does not require an employer to consider paying them additional compensation.

To help clarify the distinction between a non-exempt employee’s work and volunteer activities, consider creating a document that delineates paid job responsibilities from potential unrelated volunteer activities.

Paying Volunteers

Ministries need to take care when providing money or any other benefits to workers who are strictly volunteers. Compensation is one of the factors used in determining employment status, and while reimbursing the expenses of a volunteer is acceptable, paying anything more than a nominal amount to a volunteer for work performed may create an employment or independent contractor relationship.

Payments or benefits that are made periodically, and outside of reasonable expense reimbursement, may create difficulties and lead to a determination that a volunteer is actually an employee. This could lead to tax and employment law implications, such as withholding tax requirements and a need to pay at least minimum wage.

Ministries should either make it a practice to not provide compensation to volunteers or speak with legal and tax advisors prior to doing so to be sure the amount is nominal.