Volunteers are the vibrant root system of many nonprofits, supporting, stabilizing, and nourishing the work that blossoms above ground. But just like a healthy garden needs careful tending, thriving volunteer programs require more than goodwill. Understanding the legal landscape helps nonprofits provide a volunteer experience that is both rewarding and compliant.
Legal Status of Volunteers
Under Oregon law and federal law, volunteers are, by definition, not employees, which means they:
- Are not covered by wage and hour laws
- Should not receive compensation beyond token reimbursements
- Can be held liable for harm they cause unless they meet certain legal protections
Volunteers who receive pay or significant gifts may be reclassified as employees by overseeing agencies. To stay compliant, it is critical to treat volunteers as volunteers, no matter how helpful they are!
Volunteer Protection Laws
Both Oregon and federal law provide some legal protection for volunteers acting within the scope of their duties:
Federal Volunteer Protection Act of 1997
This Act protects unpaid volunteers from personal liability for harm they cause while performing assigned responsibilities, as long as they don’t engage in:
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- Willful, criminal, reckless, or intentional misconduct (or harm involving vehicles); or
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- Gross negligence
ORS 65.369 (Oregon’s Protection for Qualified Volunteer Directors)
Oregon provides similar protections if the volunteer is serving as a “qualified director” (e.g. an officer or director of a qualified nonprofit organization), is not being paid for their volunteer board service,* and the harm was not caused by gross negligence or intentional misconduct.
Also, ORS 30.480 provides protections for volunteer transportation services.
Important: These protections do not cover physical or sexual abuse, discrimination, or actions outside the volunteer’s defined role.
* Per ORS 65.369(4), an otherwise qualified director “shall not be considered to be compensated for personal services if the director receives payment only for actual expenses incurred in attending meetings or performing a director’s duties or receives a stipend which is paid only to compensate the director for average expenses incurred over the course of a year.”
Employees as Volunteers
Employees are welcome to volunteer, but they can’t “volunteer” for the same tasks they’re paid to do (a pitfall for organizations with small budgets). Under the Fair Labor Standards Act, employers cannot require employees to volunteer for the organization.
However, employees can volunteer for unrelated duties in their free time.
Example: A nonprofit clinic’s front desk employee may choose to help set up chairs at the annual nonprofit gala.
If employees volunteer, your organization should have a written policy clarifying:
- Their volunteer work is separate from employment
- Their decision to volunteer is optional
- Their employment status won’t be affected
Under Oregon law, volunteers may not be paid for volunteer hours, but nonprofits may reimburse volunteer expenses such as mileage, background checks, or pre-approved office supplies or travel.
Volunteer Incentives
Many organizations wish to provide incentives to reward (and retain) volunteers. There are restrictions per the IRS as to when gifts to volunteers might be considered taxable income, and therefore undesirable to provide to volunteers. Nonprofit organizations are allowed to provide gifts to volunteers as long as those gifts are of nominal value.
Some ideas include:
- a volunteer appreciation party where food and drink is provided
- personalized thank you cards or birthday cards
- certificate of appreciation
- A hat, sweatshirt, or other nominal gift with the nonprofit’s logo
- a $5 coffee gift card
Note: Avoid “stipends” tied to work performed!
When Is a Volunteer Not a Volunteer?
If any of these red flags sprout up, you may be drifting into employee territory:
- Regular schedule and set hours
- Performing duties similar to paid staff
- Receiving more than token benefits
- Implicit (or explicit) promises of future paid work
When in doubt, treat the person as a temporary employee and pay wages through payroll.
Best Practices for Working with Volunteers
- Define volunteer roles in writing: Create simple volunteer descriptions outlining responsibilities and supervision.
- Require a volunteer agreement that includes expectations and non-discrimination and non-harassment policies, a statement of no compensation, and a liability release.
- Provide training and supervision, ensuring volunteers know what to do and who to ask for help.
- Require background checks when appropriate, particularly when working with youth, elders, or sensitive information.
- Maintain liability insurance by confirming with your insurer if general liability insurance covers volunteers and consider supplemental accident insurance for volunteer injuries.
- Reimburse mileage or materials similar to your board reimbursement policy; require receipts and don’t provide stipends
Volunteer Hours and In-Kind Value
You may track volunteer hours for grant reports or matching fund requirements. However:
- Do not include volunteer hours as income in your financial statements
- Do not issue IRS Forms 1099 for volunteers
- Only include hours in-kind if they meet GAAP rules (e.g., donated legal services)
Managing volunteers well is like tending a flourishing garden: with the right structure, protections, and care, your nonprofit can grow strong, sustainable roots—empowering volunteers to support your mission for years to come.
Contact us or schedule an appointment if you would like to talk through any of these or any other nonprofit questions!
