A reader writes:
We have friends/acquaintances who own a horse farm. They give riding lessons and various other things they charge for. I’m sure they’re not making a ton of money, but as far as I know they are not a nonprofit. They often post “volunteer hours” on social media or send emails and post photos of people “volunteering” at the farm to help with various chores, including horse care, etc. I’m pretty sure this is technically illegal, but in some ways, should it be?
(I’m curious about this, but I’m not planning on doing anything about it.)
You’re right that for-profit businesses can’t legally accept volunteer help (unlike nonprofits, which can). Businesses are required by law to pay people who work for them at least minimum wage. That’s true even if the volunteers in question are happy to be volunteering and want to waive their right to be paid. (There are some exceptions to this. The Fair Labor Standards Act doesn’t require the minimum wage for workers who perform services for an “amusement or recreational establishment” if it doesn’t operate for more than seven months in any calendar year. That’s intended to cover seasonal activities like amusement parks and sports events.)
That said, despite the law, it’s not uncommon to see arrangements like your friends’ in certain fields — for example, yoga studios that have members work at the front desk in exchange for free or discounted classes, for-profit events that are partly staffed by volunteers (in exchange for free attendance or getting access behind the scenes), theaters that use volunteer ushers, etc.
People who do this generally look at it like bartering: they’re trading their labor for something else of value to them. But employers still have to comply with wage and hour standards, keep strict records of all hours worked and payments made, and provide itemized wage statements to employees, and the value of any in-kind trade needs to be reported and taxed. (Also, some states, like California, don’t allow that at all.) One exception: if someone could be legally classified as an independent contractor — meaning they’re not subject to the type of control employees are subject to and otherwise meet the legal test for independent contractors — they could choose to barter for their services, but the value of the goods or services received would still need to be reported to the IRS and taxed.
Now, you asked whether this should be illegal. Personally, I think it’s fact-dependent. One advantage of the law as written is that it prevents for-profit businesses from pressuring people into working without pay for “exposure” or to “get a foot in the door.” That’s a good thing; it prevents people who otherwise would be vulnerable to exploitation. (Or at least it’s supposed to prevent it. In reality, it still happens.) On the other hand, many people who enter into these agreements feel they’re being compensated in ways that are sufficiently valuable to them and that it gives them access to things (like classes or riding) that might otherwise be unaffordable.
Ultimately, different people will come down in different places on this.
