Volunteer Firefighter Compensation and the FLSA

Today’s FLSA Question: I am a fulltime chief of a combination fire department. We have a mix of volunteer and paid firefighters. Like many folks, we are struggling with recruitment and retention within all of our ranks, but especially within our volunteers. Recently, some of our neighboring departments began offering their volunteers an hourly rate instead of a stipend. Some are offering $10 per hour to “volunteer” during daytime hours. This new compensation plan is being used as a recruitment tool for that organization. We were advised years ago to avoid the practice of paying volunteers by the hour. As a result, we strictly provide a nominal stipend and provide expense reimbursements for limited expenses. Has the FLSA changed? Is it ok to pay volunteer firefighters by the hour?

Answer: Chief, you are not alone in your struggle. There are undoubtedly many reasons for the  current recruitment and retention problem in today’s fire service. You are correct in noting that this problem spans both the paid and volunteer services. Unfortunately, the requirements of the FLSA do not make your job any easier. To answer your question, the FLSA has not changed in recent years. Under the FLSA, the practice of paying a volunteer an hourly wage is HIGHLY unadvisable. Just by paying a volunteer an hourly rate will most likely result in turning a purported volunteer into an employee.

In order to qualify as a “volunteer” under the FLSA, the individual must volunteer “their services for civic, charitable, or humanitarian reasons without promise, expectation, or receipt of compensation.” The FLSA does allow public agency fire departments pay volunteers a “nominal fee.” However, courts and the United States Department of Labor (DOL) have held that any payment made to a volunteer cannot be “tied to productivity.” Therefore, as a general rule, paying an individual by the hour will negate his or her volunteer status. That likely explains why your organization was advised at one point in time to avoid paying volunteers by the hour.

Additionally, the DOL and courts have found that a nominal fee given to a volunteer cannot exceed twenty percent (20%) of the cost of hiring a full-time employee for providing a similar type of service. This is commonly referred to as the “20-percent rule.” The DOL has even issued guidance on how to make that calculation. The DOL advises public agencies to look within its organization to determine the “prevailing wage” for a particular position. For example, if the agency is a combination department, like yours, the agency could look at wages paid for other similar firefighter positions within the organization as a comparison tool. In the absence of such employees, the public agency is advised to look to neighboring jurisdictions and possibly data from the Department of Labor’s Bureau of Labor Statistics to determine the “prevailing wage” for that position.

Let’s apply these couple of DOL rules to your fact pattern. First, the fact that your neighboring volunteer fire organization is using an hourly rate of pay as a recruitment tool for volunteering is extremely problematic. Is that volunteer firefighter volunteering for “civic, charitable, or humanitarian reasons without promise, expectation, or receipt of compensation?” That is most likely not the case, and such an advertisement would likely serve as “exhibit 1” in any future wage and hour claim from any future disgruntled volunteer or volunteers.

Second, the fact that this neighboring jurisdiction is offering to pay volunteers by the hour, also likely negates their volunteer status. A nominal fee provided to a volunteer cannot be “tied to productivity.” The DOL and numerous courts have found that being paid by the hour is tied to productivity.

Third, let’s apply the DOL’s twenty percent rule to your fact pattern. In order to satisfy the DOL’s twenty percent rule, the prevailing wage for firefighters in this jurisdiction would be $50 per hour. It is possible that paid firefighters in that region earn that much money per hour, however that would need to be proven by the department if any of the “volunteers” decide to challenge their volunteer status at some point in time.  

Unfortunately, at the end of the day, I will venture the guess that your organization is not the only organization in your region with paid firefighters… When you boil it down, the neighboring jurisdiction paying volunteer firefighters $10 per hour also have paid firefighters, however they either do not know it yet, or are choosing to roll-the-dice.