Who is a volunteer? Can a volunteer be transformed into an employee? Can an employee be a volunteer? Can you give a volunteer gifts? What gifts can you give a volunteer?
These are all questions that come to me regularly — though they don’t always use those exact words. Covering this topic will take more than the 500 words I am allowed here, so be sure to check back next month.
A recent e-mail inquired, “One of our ministry leaders would like to give a cash gift of $50 each to a couple of her volunteers because of how much they have helped her ministry. Is this OK?”
A subsequent email stated, “This would be a staff member who uses her own cash to gift the volunteers, then she would get reimbursed by the church.”
What differentiates a volunteer from an employee?
Employees, obviously, are paid for their service to an employer. They must be paid the applicable local minimum wage; must be given minimum, paid rest breaks if they work at least three-and-a-half hours in a day; and given an unpaid meal break if they work at least five hours, which may only be waived by mutual consent if the employee works fewer than six hours in the day.
Volunteers, on the other hand, do not get paid and have no expectation of being paid for their efforts.
Two new questions arise: Does giving cash gifts to volunteers turn them into employees? Can we hide cash gifts to volunteers by disguising them as nontaxable reimbursements to an employee?
“Cash” is really the operative word, not “gift.” The words “expectation of being paid” are critically important. When a person is given cash for their work, the giver treads on the thin ice of being an employer. In this example, by reimbursing the staff member for her cash “gifts” to the “volunteers,” the church is vicariously paying the volunteers, giving the appearance of unlawfully disguising wages — which might eventually expose the church to big trouble down the road.
What motivates someone to volunteer?
My general guidance is simple: never give cash to volunteers in exchange for their effort.
Why not? Because it creates the appearance of an employment relationship — employees are paid, volunteers are not. Inadvertently transforming a volunteer into an employee can easily violate minimum wage, rest and meal break, and other labor law mandates.
If an employee works four hours in a single day without a rest break, a $50 payment fails the test because the employee should have been paid at least $52.50. What about FICA deductions and the employer’s share? How about workers’ compensation claims exposure and premiums?
Churches should be blessed with volunteers who don’t expect compensation. Volunteer guidelines are an important component of your Policies & Procedures Manual.
Rewarding volunteers for their service should be the exception, not the norm. Please don’t do it with cash.
Read part two and find solution.