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Does your Board of Education allow non exempt hourly employees to coach student teams?

If so, there may be issues as to whether such individuals are “volunteers” or employees under state and federal wage and hour law.

Opinion Letter FLSA 2006-40 is the most recent opinion letter on the subject, though there are many other opinion letters which have been issued in the past dealing with the subject as well. DOL Opinion Letter FLSA 2006-40 was written in response to a letter written on behalf of a number of school districts concerning guidance regarding the use of non-exempt school system staff to assist with coaching sports or other extracurricular activities, either as volunteers or as additional duties. In the Opinion Letter, the DOL addresses several hypothetical situations and analyzes whether compensation or overtime would be due in each given situation.

It is important to note that this Opinion Letter is not a ground breaking departure from how the Wage and Hour Division has handled such issues in the past. Rather, the Opinion Letter is a clarification of how these matters have typically been analyzed, namely: (1) an individual who performs hours of service for a public agency for civic, charitable, or humanitarian reasons, without promise, expectation or receipt of compensation for those services, is considered to be a volunteer during such hours and need not be paid for those services; (2) an employee of a public agency may provide unpaid volunteer services for that agency when no coercion is involved, the volunteer services are provided outside of normal working hours, and the volunteer services do not involve the same type of services the individual is employed to perform for that public agency; (3) volunteers may be paid expenses or a nominal fee without losing their volunteer status. Expense payments must reasonably approximate the volunteer’s actual expenses.

Generally speaking, Opinion Letter FLSA 2006-40 clarifies that: (1) the Wage and Hour Division does not assert FLSA violations for time spent by a public school employee who is also the parent when the parent volunteers in activities directly involving the child’s education and participation; (2) secretarial and clerical employees of the school district who perform volunteer services for the PTA or other school-associated organizations may be volunteers so long as they are not paid more than a nominal fee and the organization is not the same public agency as the school; (3) nonexempt employees may volunteer to perform services such as ticket taking, ushering, staffing a box office, or security at sports events, concerts and theater events so long as their duties are not the same or similar to those services they are otherwise employed by the school district to perform; and (4) Secretarial, clerical, and other employees who volunteer to participate in extracurricular activities, such as dance chaperones, student proctors, field trip chaperones, or crowd control monitors may be unpaid volunteers so long as their duties are not the same or similar to the work they normally perform and are not paid more than a nominal fee.

Opinion Letter FLSA 2006-40 goes on to state that “assuming the work performed by paid employees of the school district is not the same as or similar as to the work performed as volunteers the answer [as to whether they must be paid minimum wage/overtime for all hours worked] depends on whether the payment for the activity is a nominal fee or compensation for services.”

The issue has been addressed in the past by the Wage and Hour Division in Department of Labor Opinion Letter FLSA 2005-51 as to whether stipends to non-teaching, nonexempt school employees who volunteer as coaches or advisors for the school’s sports teams and clubs constitute “nominal fees” as described in 29 C.F.R. § 553.106(e) and (f). In addressing this issue, the Department stated “in the case of volunteer coaching, the Department believes that 20 percent of what the district would otherwise pay to hire a coach or advisor for the same service is appropriate in dividing between a permissible nominal fee and an impermissible payment. Such a threshold assumes that the coaches are freely volunteering their services and the school district simply provides a lump sum payment or series of payments without regard to wins or loses or hours worked.

Accordingly, the DOL views a willingness to volunteer for 20 percent of the prevailing wage for the job as “a likely indication of the spirit of volunteerism contemplated by the . . . FLSA.” DOL Opinion Letter FLSA 2006-28 (August 7, 2006). See also DOL Opinion Letter FLSA 2005-51 (Nov. 10, 2005) (applying 20% rule to determine whether fee paid to school district employees for coaching or being an extracurricular advisor was nominal). “Another key factor in the context of school coaching or advising a club is whether the amount of the fee varies as to the particular individual spends more or less time engaged in the volunteer activities or varies depending upon the success or failure of a particular team or school activity.” DOL Opinion Letter FLSA 2005-51 (Nov. 10, 2005). Therefore, fees based upon “the win loss record of a team, or the degree of student involvement in a particular club, or other similar factors relevant to the quality or quantity of the team, club, or activity” would be considered tied to productivity. Id.

It is important to remember, however, alternative methods of computing overtime pay exist for employees who perform two or more jobs for the same employer. The regular rate for overtime purposes can be calculated using the weighted average of those rates. Section 7(g)(2) also allows payment to be based on the type of work performed during the overtime hours.

Comments?  Email Thomas A. Carroll at [email protected] or post your comments here.