Author: LegalEase Solutions

QUESTION PRESENTED

 Whether the American Nurses Credentialing Centre (ANCC) certification appraisers can serve as volunteers under the Fair Labor Standards Act (FLSA) and Department of Labor (DOL) regulations and guidelines, when ANCC pays the appraisers’ travel and lodging expense for onsite training and pays a $50 nominal fee per application appraised?

 SHORT ANSWER

First, we found that the plain language of the Fair Labor Standards Act (FLSA), and applicable case law, applied the term “volunteer” only to those who do work for “public agencies.”  Therefore, it appears that the FLSA and corresponding regulations do not apply to ANCC insofar as the law for “volunteers” goes.

The FLSA was not intended to treat all persons as employees. In administering the FLSA, the Department of Labor appears to follow consider these factors when individuals volunteer in non-governmental organizations. Therefore, in the private sector, the analysis centers more on whether or not the person is an employee.

 RESEARCH FINDINGS

“Volunteer” defined under FLSA /DOL Regulations      

Generally, “[t]he FLSA does not itself define volunteer, but pursuant to a Department of Labor regulation promulgated under the FLSA, a volunteer is an individual who performs hours of service for a public agency for civic, charitable, or humanitarian reasons, without promise, expectation or receipt of compensation for services rendered.” Purdham v. Fairfax Cnty. Sch. Bd., 637 F.3d 421, 427 (4th Cir. 2011)(emphasis added).  The plain language of the statute and correlating regulations appear to make clear that the term “volunteer” is used in the context of service for a public agency.  For example, the Court of Appeals held that “plaintiffs[volunteers] were not employees . . . for purposes of the FLSA when they performed volunteer emergency services for private, non-profit rescue squads.” Benshoff v. City of Virginia Beach, 180 F.3d 136, 149 (4th Cir. 1999).

The Act provides . . . that an individual performing volunteer services for units of state and local governments will not be regarded as an “employee” for the purpose of entitlement to benefits under the FLSA:

The term employee does not include any individual who volunteers to perform services for a public agency which is a State, a political subdivision of a State, or an interstate governmental agency.

Evers v. Tart, 48 F.3d 319, 320 (8th Cir. 1995)(quoting 29 U.S.C. § 203(e)(5)).

Moreover, “the activities of federal volunteers are directly supervised by the Government, unlike the activities of those alleged to be volunteering their services to private entities.” Tony & Susan Alamo Found v Secy of Labor, 471 US 290, 306 (1985). Therefore, it appears that the analysis would not fall under whether the appraisers are volunteers under the act, but whether or not they are deemed employees under the act.

  “Employee” defined under FLSA

“Section 3(g) of the Act[FLSA] defines employ as including to suffer or permit to work and s 3(e) defines employee as any individual employed by an employer.” Walling v. Portland Terminal Co., 330 U.S. 148, 152 (1947). “The definition suffer or permit to work was obviously not intended to stamp all persons as employees who, without any express or implied compensation agreement, might work for their own advantage on the premises of another.” Id.

According to the FLSA:

The Act defines an employee as any individual employed by an employer, and the word employ as used in the Act includes to suffer or permit to work. But since the obvious purpose of the Act is to establish minimum wages and maximum hours, the words last quoted can not be interpreted to include as an employee one over whose hours of labor the employer has no control, and to whom the employer is under no obligation to pay wages.

Helena Glendale Ferry Co. v. Walling, 132 F.2d 616, 620 (8th Cir. 1942).

Additionally, court while applying the economic reality test looks at:

(1) the degree of control exerted by the alleged employer over the worker;

(2) the worker’s opportunity for profit or loss;

(3) the worker’s investment in the business;

(4) the permanence of the working relationship;

(5) the degree of skill required to perform the work; and

(6) the extent to which the work is an integral part of the alleged employer’s business.

Baker v. Flint Eng’g & Const. Co., 137 F.3d 1436, 1440-41 (10th Cir. 1998).

Also,

In deciding whether an individual is an employee or an independent contractor under the FLSA, a district court acting as the trier of fact must first make findings of historical facts surrounding the individual’s work. Second, drawing inferences from the findings of historical facts, the court must make factual findings with respect to the six factors set out above. Finally, employing the findings with respect to the six factors, the court must decide, as a matter of law, whether the individual is an employee under the FLSA. None of the factors alone is dispositive; instead, the court must employ a totality-of-the-circumstances approach.

Id. at 1441.

Further, “economic dependence may be the ultimate controlling factor in a given situation for finding an employment relationship.” Donovan v. Brandel, 736 F.2d 1114, 1116 (6th Cir. 1984). But, “[t]he issue of the employment relationship does not lend itself to a precise test, but is to be determined on a case-by-case basis upon the circumstances of the whole business activity.” Id. And, “the test of the applicability of the Act[FLSA] has been held to be whether or not as a matter of economic fact there is an employer-employee relationship involved.” Patel v Wargo, 803 F.2d 632, 636 (11th Cir. 1986). Hence, “[t]he question whether an employee is engaged in commerce within the meaning of the present Act [FLSA] is determined by practical considerations, not by technical conceptions.” Mitchell v. C.W. Vollmer & Co., 349 U.S. 427, 429 (1955).

In determining whether an employee-employer relationship exists under the FLSA, the court applies the economic reality test. In Baker v. Flint Eng’g & Const. Co., 137 F.3d 1436 (10th Cir. 1998), the court held that an employee-employer relationship existed between the parties. Id.

The court reasoned that when an employee is hired by the employer for a job, are informed about working hours, hourly pay rate,  and the portion of project they will be working on that working day, the employees are not asked to exercise their discretion in applying their skills. Id. at 1444.  Therefore, where the facts indicate an extreme amount of control over the work by the employer, the person doing the work is highly likely to be considered an employee.

However, in Donovan v. Brandel, 736 F.2d 1114 (6th Cir. 1984), the court held that the harvesters (workers) were “not employees” within the meaning of FLSA. Id. The court reasoned that because the relationship between the farmer and the harvesters was not of a permanent nature, and the harvesters possessed a specialized degree of skill in the work to be performed, these factors weighed in favor of finding no employer/employee relationship, even though they received a weekly share of the proceeds. Id. at 1116-17.

Similarly, in Walling v. Portland Terminal Co., 330 U.S. 148 (1947), the Court found that the FLSA did not stamp all persons who do work for an employer as employees. Id. at 152.  The Court reasoned that if a trainee’s activities do not displace any of the regular employees, then his work does not expedite the company business and the company receives no “immediate advantage” from any work done by the trainees. Id. at 153. The Court further reasoned that those who work for their own advantage on the premises of another are not necessarily “suffered or permitted to work” such that they could be considered employees. Id. at 152.

Based on the foregoing, it appears that any analysis of whether a person is an employee is highly factually dependent. No one factor controls, and even in cases where some factors may weigh heavily in one direction, the overall context may shift the court in the opposite direction.

Here, the appraisers may be evaluated with reference to the task being performed, the amount of skill or direction they bring to the task as opposed to the amount of control or direction supplied by ANCC, the nominal amount of their fee, the infrequent and temporary basis of the work schedule, and the fact that this work does not displace or replace work that would otherwise be done by ANCC’s own regular employees, or the regular employment the appraisers might be engaged in.

CONCLUSION

Based on the foregoing, it would appear that the appraisers, on the totality of the circumstances, would not be deemed to be employees.  Further, it may be possible to make an argument that the concept of “volunteer,” although presently applicable only to those who do work for a public agency, provides good precedent that can be equally applied in the private sphere.