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Note: When Volunteers Become Employees: Using a Threshold-Remuneration Test Informed by the Fair Labor Standards Act To Distinguish Employees from Volunteers

By Emily Bodtke. Full text here.

Despite the recognized importance of determining who is an “employee” for purposes of legal coverage, the concept remains unsettled. The confusion over how to define “employee” is now spreading to upset the boundary between employees and volunteers. As voluntarily unpaid workers increasingly bring lawsuits alleging discrimination under federal statutes, a majority of federal courts apply the threshold-remuneration test to determine whether those volunteers are employees entitled to legal protection. The threshold-remuneration approach requires the volunteer/employee to show significant compensation in the form of direct cash payments or significant benefits before the court will consider other common law “control” factors historically used to show employment. The Ninth and Sixth Circuits, however, reject the majority approach, instead treating remuneration as one of several non-dispositive factors in demonstrating an employment relationship. This circuit split exacerbates the already existing difficulty in determining who is an employee. This Note argues that while the threshold-remuneration test offers a more logical and efficient method than existing multi-factor tests, it suffers from inconsistency in application and incongruity with the Fair Labor Standards Act (FLSA). Lack of a precise definition of “remuneration” results in differing applications of the test, while the lack of continuity with the FLSA creates situations where an individual might be an employee under one federal statute but not another. These deficiencies threaten to undermine the test’s advantages.

This Note proposes that courts adopt a modified version of the threshold-remuneration test informed by the FLSA to distinguish employees from volunteers. By integrating the FLSA’s standards for what levels of compensation create employment and when minimum compensation is required, courts can refine the threshold-remuneration test’s definition of “remuneration” and simultaneously harmonize the FLSA with anti-discrimination statutes. This approach can represent a small step towards much-needed clarity and consistency in employment law’s definition of “employee.”