©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

Legal definitions of a Volunteer and an Employee

Mistakes that change your

Volunteer

into an

Employee (

what

not

to do)

Intern laws and how to legally avoid this mess (Externships)

2014 Case Law – 6

th

Circuit Court

How to mitigate your risks

There is nothing just about the law, it is just the law

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

The legal definition of an EMPLOYEE

(it is more than just pay )

“a person in the

service

of another, under any contract of hire, expressed or implied, oral or written, where the employer has the power

or

right to control

and direct the person in the material details of how the work is to be performed.” US law obligates employers to cover employees with FLSA wages/overtime, Civil Right Acts, Age Discrimination, Employment Retirement Security Act, Americans with Disability Act and Family/Medical Leave Act (12 weeks)

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

Landmark case: Microsoft $97 Million

Microsoft guilty of classifying independent contractors as non-employees

The Court decision says Microsoft

CONTROLLED the work process

and that makes the persons employees. Independent contractors do NOT control the work process only the end result/task of the work.Another 5 Court cases found the same Why do we care?

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

IRS developed 10 factor “common law test”

to determine if person is Employee

Employer controls details of the work

Worker is engaged in the business of the employer

Employer supervises the workerSkill level need NOT be high or uniqueEmployer provides the instrumentalities, tools and location of work Worker provides services only to one employer

Worker is employed for an extended period of time

Worker is part of the employers regular business

AND INTENT: employer and worker intend to create a worker/employee relationshipWorker is paid by the hour or other computation based on time worked to determine pay

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

Yet, the Court muddied it by adding their 6 factors that determine PAY

INTEGRATION: person provides services that are part of the employers regular business

INVESTMENT: person has no investment in the employers work equipment and facilities

RIGHT TO CONTROL: management retains a degree of control over the work

RISK: person does not have an opportunity to make a profit or suffer lossSKILL: work does not require special skills or unique judgement

CONTINUING RELATIONSHIP: person has an extended or permanent relationship with the business (court case said as little as once a month)

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

The Bad NEWS is

Under Federal Law, the overriding factor is

“ who has the RIGHT to control the work process –regardless of the title applied to the worker”

Now that puts us in a difficult situation because what we in NPO’s say is a VOLUNTEER and what we think is PAY is not what the IRS and Federal Courts have determined. Now what?

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

6th Circuit Federal Court of Appeals

Using the list of “common laws factors”, this Federal Court in a 2014 Ohio case, clarified a volunteer vs an employee.

In the case,

Sister Michael Marie vs American Red Cross,

two nuns sued the American Red Cross for religious discrimination, retaliation and harassment under Ohio law©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

Court decision:

The sisters had

control

over when and how they volunteered and could refuse a task or time

The duties were not consistent with the duties of normal employee (Position description vs job description)Duties of volunteer were more tasks than for employeesAccess to volunteer trainings(CPR, etc.) were available to the public. (Yes, the court ruled

trainings are a benefit

)

No monetary compensation, which the Court ruled as the control of the volunteer. NOT the pay as a consideration but the control of the pay over an employee. Thus, economically dependent on the employer

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

Court final legal ruling:

Before adding non-compensated (volunteer) to supplement paid workers answer these questions:

How much Control, if any, will you exercise over them?

Will you grant them “benefits’ meaning any real financial considerations for an on-going relationship?

Slippery slope to employee “I did not know it was against the law” will not stand up in court. The Courts say you have a

Duty of Care

for your agency and volunteers©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

Mitigate your Risks

Volunteer Position Description- define tasks, supervisor, training needed, schedule, call-off and disclaimer.

Have volunteer sign

“ I understand and agree this volunteer position is not a means to future employment nor am I considered an employee of ABC Agency. I have read, understand and agree to all terms, limitations, regulations and safety requirements in the current and updated copy of my Volunteer Handbook”.

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

Continued

Consistency keeps you out of court !

Be consistent with all volunteers and explain, in detail, why rules are in place to protect the integrity of your agency, your clients and your Mission.

Telephone, telegraph and tell-a-volunteer

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

Continued

Create a Volunteer Handbook ( not manual)

give every volunteer a copy, have copy in your office, the volunteer rest area and post on your website in the volunteer only section

.

Update constantly as occasions ariseTrain, train, train your staff on the ‘slippery slope’ of allowing volunteer to become FLSA employee.Be sure Executive staff and supervisors clearly understand and sign off so ‘best intentions’ do not put your agency in jeopardy with IRS or DOL

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

C Y A

There is nothing just about the Law, it is just the Law

Court says you have a Duty of Care, so ‘best intentions and I didn’t know’ are unacceptable

It costs $25-60 for a person to sue your agency. You

will settle out of court and it will cost big $’s to your budget. Donors, funders and UW do not like agencies that are sued.

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

Employees as your volunteers? No!

The Department of Labor-Workplace Rights states:

“paid employees of a NPO organization cannot volunteer to provide the same type of services to their NPO that they are employed to provide.”

That means your acct staff or CFO cannot volunteer to handle the cash at your event, to take receipts or tickets or auction money. These employees MUST be paid.

Dept. of Labor

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

INTERNS in a NPO

Justice is blind and Law is Just the Law

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

Supreme Court: 6 legal criteria for any Interns. MUST meet all 6 criteria

Internship is for the benefit of the Intern

No job entitlement at conclusion of position

Intern cannot displace an employee; must be supervised by existing staff

Internship must be similar to a training given in an educational environmentEmployer and intern understand intern is not entitled to wages during the internshipThe employer that provides training derives NO IMMEDIATE ADVANTAGE from projects of the intern and on occasion the NPO operations may actually be impaired.

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

How to avoid this legal criteria?

Use the term

EXTERN

only

and treat as a skilled project /task volunteerTreat as a extended period volunteer but add begin and end dates, specific criteria and Extern position description/duties ,assign specific supervisor, extern sign no expectation of compensation or employmentExceptions have been made in some courts for foodbank, religious, civic and NPO’s on a case by case basis.

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016

Any Questions? Concerns?

©No reproduction without the written consent of BC Consultants,, Cincinnati, OH, Cissy Hansen, 2016