Co-op Law
Resources for Worker Cooperatives
Co-op Law
Resources for Worker Cooperatives

Using Volunteers in a Cooperative

Volunteers are people that do work for charitable, religious, or humanitarian benefit. Before taking on volunteers, a cooperative should understand who is considered a volunteer along with the rules and exceptions specific to volunteers. The penalties for misclassifying a worker can be severe and include criminal and civil liability.

Who can be considered a volunteer?

Volunteers  are people that do work for charitable, religious, or humanitarian benefit. The work a volunteer does is separate from their day to day job. As a general rule, you cannot volunteer for a for-profit business (including a cooperative) unless you are classified under one of the other three categories below (interns, independent contractors, or partners).  However, most cooperatives will not meet the definition of “charitable, religious, or humanitarian,” unless they are nonprofit organizations that are tax exempt under 501(c)(3) or 501(c)(4). Most childcare cooperatives, for example, are 501(c)(3) nonprofits. There are some extra rules and exceptions to the rules.

Rules and exceptions to consider before taking on volunteers

  1. You might be able to volunteer for a for-profit business if it has a defined and separate charitable project. Let’s say you have a cooperative café and once per month it opens up to the public and serves only free food to people in need. This is a gray area, but this may be a situation where members of the public could come in and volunteer. If the café has regular employees however, those employees probably would not be considered volunteers because the work may be too similar to the work they normally do for pay.
  2. You might not be able to volunteer for a nonprofit if it is operating a commercial enterprise serving the general public. This is also a gray area, because many high profile nonprofits, such as Girl Scouts, allow volunteers to sell things to the public. But, the rule stated by the Supreme Court and California law is: people cannot volunteer for “ordinary commercial activities” that “serve the general public,” even if those activities are operated by and for the benefit of charities and religious organizations.
  3. “Paying” volunteers with food or other valuable perks might mean they are employees: In the Fair Labor Standards Act (FSLA), the Department of Labor says that people are allowed to volunteer so long as it is “without promise, expectation, or receipt of compensation for the services rendered, although a volunteer can be paid expenses, reasonable benefits, or a nominal fee to perform such services.” So you can give your volunteers a little something, but not a lot.
 

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