- Workers at consignment sales run by a for-profit company were employees under the Fair Labor Standards Act (FLSA), not volunteers, the U.S. Circuit Court of Appeals for the D.C. Circuit has ruled (Rhea Lana, Inc. v. U.S. Department of Labor, No. 17-5259 (D.C. Cir. June 7, 2019)).
- The workers were consignors who also worked five-hour shifts during the sales, in exchange for priority access to shop, according to court documents; those who worked the most shifts got top priority. These workers were vital to the company's sales operations, and the company offered pay of $8 per hour when it could not find enough people to staff the sales via priority shopping opportunities alone.
- The D.C. Circuit upheld a district court's determination that the workers were employees rather than volunteers. While some facts suggested that the workers may have been properly classified as independent contractors rather than employees or volunteers, the company never made this argument, so it was not considered by the court.
As the D.C. Circuit noted in its opinion, the U.S. Department of Labor's (DOL) longstanding position is that "with very limited exceptions, for-profit companies cannot treat workers as volunteers instead of employees under the FLSA."
A volunteer, according to DOL, is someone who "volunteers freely for public service, religious or humanitarian objectives, and without contemplation or receipt of compensation. Typically, such volunteers serve on a part-time basis and do not displace regular employed workers or perform work that would otherwise be performed by regular employees." Additionally, paid employees of non-profits cannot generally "volunteer" the same type of services to their non-profit that they are employed to provide.
While workers are generally prohibited from volunteering their services to for-profit, private sector employers, interns and students are allowed to work without pay in limited circumstances. DOL's internship rules require that, among other things, the "primary beneficiary" of the working relationship is the intern rather than the company for which the work is performed.