When you walk into a busy nonprofit or community event, it can be tough to tell who is a paid staff member and who is volunteering their time. Yet, the answer to the volunteer vs. employee question shapes everything from legal protections to how people experience your mission.

This distinction isn’t just a matter of titles; it impacts compensation, supervision, scheduling, onboarding, and compliance with labor laws. Misclassifying a volunteer as an employee (or vice versa) can lead to serious legal and financial risks, even for well-meaning organizations.

If you’re not sure how to spot the difference, you’re in good company.

In this guide, we’ll break down the key characteristics that separate volunteers from employees, walk through common legal considerations, and help you create clear role boundaries that support both safety and trust.

Main Takeaways:

• Volunteers donate time without compensation, while employees receive wages for their work
• The Department of Labor provides clear guidelines to distinguish volunteers from employees
• Proper documentation helps maintain clear boundaries between staff and volunteers. Managing volunteers requires different approaches than supervising employees.
• Clear role definitions, flexible scheduling, and separate onboarding processes help reinforce appropriate boundaries and protect your organization.

What Is the Difference Between a Volunteer and an Employee?

The fundamental difference between a volunteer and an employee lies in the compensation relationship. Employees perform work in exchange for agreed-upon wages or salary, while volunteers contribute their time freely without financial expectation. This distinction shapes everything from legal protections to daily operations.

A volunteer donates their skills and time to support an organization's mission, typically at nonprofits, schools, hospitals, or community groups. Their motivation stems from personal values rather than financial gain, whether seeking to advance a cause they believe in, develop new skills, build community connections, or fulfill service requirements. Volunteers retain significant autonomy in when and how they contribute, though they still follow organizational guidelines.

An employee performs work under a formal employment agreement that establishes a clear exchange of labor for compensation. This relationship includes defined expectations around work quality, attendance, and performance metrics. 

Employees operate within structured roles with specific responsibilities, adhere to established schedules, and receive protections under various labor laws, including minimum wage requirements, overtime provisions, workplace safety regulations, and anti-discrimination statutes.

Quick Comparison: Volunteer vs. Employee

Characteristic: Compensation

Volunteer: No pay expected

Employee: Receives wages/salary

‍

Characteristic: Legal Status

Volunteer: Not covered by FLSA

Employee: Protected by labor laws

‍

Characteristic: Motivation

Volunteer: Mission-driven

Employee: Financial compensation

‍

Characteristic: Control

Volunteer: Greater autonomy

Employee: Employer direction and oversight

‍

Characteristic: Schedule

Volunteer: Flexible, self-determined

Employee: Set by the organization

Is volunteering considered employment? No. According to the Department of Labor, voluntary work is not considered employment when it meets specific criteria outlined in FLSA Section 3(e)(4)(A) and related guidance.

Key indicators of volunteer status:

• Service motivation: Working toward charitable or humanitarian objectives without coercion, typically at religious, civic, or nonprofit organizations where the volunteer feels a personal connection to the mission
• No compensation expectation: Performing service without anticipation of payment, though nominal expenses, reasonable benefits (like meals), and small tokens of appreciation (under $75 value) may be permissible
• Role distinction: Not displacing or replacing genuine employees, performing different functions, or contributing on a sporadic or limited basis rather than regular full-time work
• Time commitment: Offering services freely without pressure or coercion, typically for limited hours that don't resemble a standard work schedule
• Organizational relationship: Serving public agencies or nonprofit charitable organizations rather than commercial businesses seeking unpaid labor

Compensation, Compliance, and Legal Considerations

Understanding the legal distinctions between volunteers and employees is critical to protecting your organization from costly mistakes. This section breaks down key rules around compensation, documentation, and risk, so you can stay compliant and build trust from the start.

Volunteers Cannot Receive Compensation

Volunteers cannot receive wages, salaries, or employee-style benefits. The FLSA volunteer guidelines emphasize that if a volunteer expects to receive compensation or significant perks for their service, this can result in the individual being classified as an employee.

Is volunteer work considered employment if small tokens are provided? No. Organizations can offer:

• T-shirts, snacks, or event swag
• Mileage or parking reimbursements
• Thank-you notes or certificates

However, these items cannot resemble wages or compensation:

• Regular gift cards or cash equivalents
• Consistent stipends or bonuses
• Promises of paid work based on volunteer performance

Employees Are Covered by Labor Laws

Employees receive comprehensive legal protections under the Fair Labor Standards Act (FLSA), including minimum wage requirements, overtime provisions, and child labor restrictions. 

They're also covered by workers' compensation insurance for: 

• Job-related injuries
• Unemployment benefits
• Equal Employment Opportunity Commission (EEOC) anti-discrimination safeguards. 

The FLSA draws a bright line between employees and volunteers—the moment someone receives compensation (wages, salary, or substantial benefits) for services, they generally fall under these protective regulations.

Does volunteer work count as employment for labor law purposes? No. The Department of Labor volunteer fact sheet (FLSA Fact Sheet #14A) explicitly states that individuals who volunteer or donate services for public service, religious, or humanitarian objectives without expectation of compensation are not considered employees under the FLSA.

This exemption applies when the volunteer service is freely given, performed for civic, charitable, or humanitarian reasons, and delivered to public agencies or qualified nonprofit organizations, not commercial enterprises seeking unpaid labor. 

Organizations must ensure volunteer roles remain genuinely voluntary and distinct from employment to maintain this classification.

Volunteers Require a Different Type of Documentation

While volunteers aren't subject to the same labor laws as employees, they still need proper documentation to protect both parties. These include:

• Signed volunteer agreements or waivers that outline responsibilities, time commitments, and liability protection for the organization
• Background checks and screening procedures (especially when working with vulnerable populations like children, the elderly, or disabled individuals) to ensure safety and minimize risk
• Clear role descriptions defining their unpaid, mission-aligned contribution with specific boundaries to prevent scope creep into employee-like responsibilities
• Emergency contact information and relevant health disclosures that might affect volunteer activities
• Confidentiality agreements when volunteers may access sensitive organizational or client information

Important Documentation Tip: Using a Volunteer Management System (VMS) helps maintain proper records that distinguish between staff and volunteers, protecting your organization from compliance issues.

Misclassification Can Trigger Serious Risk

Incorrectly treating a volunteer as an employee or vice versa can result in significant consequences:

• Wage and hour claims: Volunteers misclassified as employees may retroactively seek unpaid minimum wages, overtime, and penalties that can stretch back several years
• IRS audits or penalties: Misclassification can trigger tax examinations resulting in back taxes, interest charges, and penalties for failure to withhold employment taxes
• Workers' compensation disputes: Injured volunteers might claim employee status to access benefits, leading to insurance coverage gaps and unexpected liability
• Employment law violations: Organizations face potential discrimination claims, wrongful termination suits, and other employment protections that don't typically apply to volunteers
• Loss of nonprofit status (in extreme cases): Systematic misclassification can be viewed as private benefit or inurement, jeopardizing tax-exempt status

The FLSA volunteer work guidelines provide a framework to avoid these risks. Regular classification audits, written volunteer agreements, clear role documentation, consistent policy enforcement, and properly configured volunteer management systems are your best safeguards against costly misclassification errors.

Managing Volunteers vs. Employees: Expectations and Oversight

While volunteers and employees may work toward the same mission, how you manage them should look very different. This section explores the differences in supervision, scheduling, and accountability, so you can support both groups appropriately without crossing compliance lines.

Volunteers Thrive on Flexibility and Mission Alignment

Volunteers typically serve based on availability and interest, not fixed shifts, making volunteer scheduling software especially helpful for coordinating their shifts. Their commitment stems from a passion for your mission, not financial necessity. In fact, volunteers experience 59% higher morale compared to non-volunteers.

Best practices for volunteer engagement:

• Flexible scheduling: Offer opt-in opportunities rather than rigid commitments
• Mission connection: Regularly reinforce how their work advances your cause
• Recognition: Acknowledge contributions in meaningful, non-monetary ways

Avoid creating full-time, rigid "volunteer roles" that resemble jobs. This maintains clear boundaries between voluntary workers and employees.

Employees Operate Within Structured Roles and Schedules

Employees work within defined parameters set by the organization. They follow established schedules, adhere to time-off policies, and maintain availability as required by their role.

Management can legally enforce scheduling, productivity, and task completion expectations for employees. This level of control is a key factor in distinguishing employment from volunteering.

Ready to Streamline Your Volunteer Program? Book a demo to see how VolunteerMatters can help you maintain proper classification while maximizing impact.

Volunteers Should Report to Coordinators, Not Managers

Volunteers benefit from supportive coordination rather than direct management. They value purpose, autonomy, and guidance, not micromanagement.

Effective volunteer coordination includes:

• Clear expectations and resources
• Designated points of contact for questions
• Support systems that respect autonomy

Employees Follow a Defined Chain of Command

Employees operate within established supervisory structures with clear reporting lines, formal performance evaluations, and specific accountability metrics. Their work typically follows a hierarchical chain of command with documented expectations for productivity, quality standards, and professional development goals. 

This structured management approach forms the foundation of the employment relationship, but it would feel overly controlling and potentially alienating for volunteers.

A helpful distinction: Volunteers collaborate, employees report. While employees function within defined accountability frameworks, volunteers thrive in environments emphasizing partnership, autonomy, and mission connection rather than top-down direction.

What Are the Differences in Onboarding and Training?

Employee onboarding typically involves formal processes, job-specific training, and signed employment contracts. It's comprehensive and often legally required.

Volunteer onboarding should be simpler while still covering essentials:

• Mission orientation: Connecting volunteers to your purpose
• Role clarity: Defining expectations and boundaries
• Safety basics: Ensuring volunteers can serve safely
• Documentation: Completing necessary waivers or background checks

The goal is to make volunteers feel welcome and prepared without overwhelming them with procedures designed for employees.

Can a Person Be Both a Volunteer and an Employee?

Can employees volunteer to work for free at the same organization? Yes, but with strict boundaries. Roles must be completely separate. For example, an administrative staff member volunteering at a weekend fundraising event or a finance director coaching youth sports in your community program.

Critical requirements:

• Volunteer hours must be unpaid and unrelated to paid duties. The Department of Labor specifically prohibits employees from "volunteering" for the same or similar tasks they perform as paid staff
• No pressure or expectation to volunteer. Participation must be genuinely optional without implied benefits to employment status or advancement opportunities
• Clear separation of roles and responsibilities. Volunteer activities should occur outside normal working hours and involve distinctly different functions from the employee's regular position
• Different supervision and accountability. Ideally, the employee should report to different coordinators when volunteering than their workplace supervisor to prevent role confusion

Maintain separate records and agreements for each role to demonstrate clear boundaries between paid and unpaid work. This includes distinct volunteer applications, waivers, and time tracking systems that don't overlap with employment documentation. 

Many organizations use separate databases or marked sections within their volunteer management system to prevent compliance issues.

Legal Clarification
The Department of Labor states that employees cannot "volunteer" for the same type of work they are paid to perform at the same organization.

Why Classification Clarity Matters for Your Organization

Drawing a clear line between volunteers and employees isn’t just about compliance; it’s about creating a healthy, trustworthy foundation for your entire organization.

Builds Trust and Transparency

Clear role definitions create a culture of respect and transparency. When volunteers and employees understand their unique contributions, they collaborate more effectively.

Confusion about who is paid and who isn't can lead to resentment, burnout, and high turnover in both groups.

Supports Consistent Program Management

When everyone understands their scope and responsibilities, programs run more smoothly; an example of operational insights and best practices in action. Coordinators can manage expectations, onboarding, and communication more effectively with clear boundaries.

Protects Organizational Integrity

Proper classification reflects professionalism and credibility, not just legal compliance. Boards, funders, and community partners expect ethical and well-documented role structures.

Aligns People With Purpose

When volunteers are treated as valued contributors, not unpaid employees, they engage more deeply with your mission. Clear classification creates space for volunteers to bring passion and flexibility while employees provide stability and accountability. 

In fact, 71% of employees emphasize the importance of working in an environment that supports giving and volunteering.

Streamline Volunteer Management and Stay Compliant with VolunteerMatters

Proper classification of volunteers and employees protects your organization and strengthens your mission. To maintain clear boundaries:

1. Document roles clearly and separately
2. Provide appropriate volunteer training for each group
3. Use different recognition approaches
4. Maintain consistent policies

A volunteer management system like VolunteerMatters helps automate these processes, ensuring proper documentation while reducing administrative burden. Our platform makes it easy to onboard volunteers, track hours, and maintain compliance, all while keeping volunteer and employee records appropriately separated.

Ready to streamline your volunteer management while maintaining proper classification? Book a demo to see how VolunteerMatters can help.