Minnesota Intern Law

Non-Profit Organizations and Government Agencies

The Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., contains minimum wage and overtime requirements that generally do not apply to volunteered services to nonprofit charitable organizations or government agencies; thus, unpaid internships in these agencies are generally permissible under federal law.

The definition of “employee” in the FLSA exempts such individuals:

(4)       (A)       The term “employee” does not include any individual who volunteers to perform services for a public agency which is a State, a political subdivision of a State, or an interstate governmental agency, if—

(i)               the individual receives no compensation or is paid expenses, reasonable benefits, or a nominal fee to perform the services for which the individual volunteered; and

(ii)              such services are not the same type of services which the individual is employed to perform for such public agency.

           (B)      An employee of a public agency which is a State, political subdivision of a State, or an interstate governmental agency may volunteer to perform services for any other State, political subdivision, or interstate governmental agency, including a State, political subdivision or agency with which the employing State, political subdivision, or agency has a mutual aid agreement.

(5)           The term “employee” does not include individuals who volunteer their services solely for humanitarian purposes to private non-profit food banks and who receive from the food banks groceries.

29 U.S.C. § 203(e)(4), (e)(5). 

According to the USDOL, “[t]he FLSA makes a special exception under certain circumstances for individuals who volunteer to perform services for a state or local government agency and for individuals who volunteer for humanitarian purposes for private non-profit food banks. [The Wage and Hour Division] also recognizes an exception for individuals who volunteer their time, freely and without anticipation of compensation for religious, charitable, civic, or humanitarian purposes to non-profit organizations. Unpaid internships in the public sector and for non-profit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible.”  U.S. Department of Labor Wage and Hour Division, Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act.

The state wage and hour statute, Minnesota Fair Labor Standards Act (“MFLSA”), Minn. Stat. §§ 177.21 et seq., provides similar exemptions.  The definition of “employee” under the MFLSA does not include “any individual who renders service gratuitously for a nonprofit organization.”  Minn. Stat. § 177.23, subd. 7(7).  This exemption can be destroyed, however, if the employer reimburses the volunteer for expenses that are not itemized.  See Minn. R. 5200.0230 ("Gratuitous service is voluntarily donated work performed by a person who receives for it no monetary compensation or other valuable consideration. The individual may be reimbursed for out-of-pocket expenses needed to perform the services, but only if these expenses are itemized. The acceptance of an expense allowance (that is, a gross sum provided with no itemized list of expenses) makes the individual nonexempt. See Minn. Stat., § 177.23, subdivision 7, clause (7).").

Likewise, the definition of “employee” under the MFLSA does not include “any individual who serves as an elected official for a political subdivision or who serves on any governmental board, commission, committee or other similar body, or who renders service gratuitously for a political subdivision . . . .”  Minn. Stat. § 177.23, subd. 7(8).

The USDOL has provided guidance in determining whether an individual is a volunteer under the FLSA.  Some of the factors that the USDOL focuses on include:  

  • Whether the entity receiving the services is for-profit, non-profit, or a government agency;
  • Whether any compensation is given to the volunteers, such as money, fringe benefits, services etc.;
  • The amount of commitment by the volunteer (e.g., occasional, part-time, full-time services);
  • Whether regular employees are displaced by the volunteers;
  • Whether the volunteer services are of the kind typically associated with volunteer work; and
  • Whether the volunteer services are performed free of coercion or pressure.

See, e.g., U.S. Dep’t of Labor, Wage and Hour Division, Opinion Letter FLSA2006-4 (Jan. 27, 2006); U.S. Dep’t of Labor, Wage and Hour Division, Opinion Letter FLSA2001-18 (July 31, 2001).

Non-profit organizations are, however, permitted to pay volunteers stipends or “expenses, reasonable benefits, a nominal fee, or any combination thereof, for their service without losing their status as volunteers.”  29 C.F.R. § 553.106(a).  There is no definition of exactly what constitutes a “nominal fee” in the FLSA or regulations.  The regulations provide that certain expenses may qualify as nominal, such as reimbursement for the cleaning and maintenance of uniforms for the volunteer services, reimbursement for out-of-pocket expenses such as cost of meals and transportation, reimbursement for tuition costs related to classes designed to teach the volunteers to perform the volunteer services, reasonable benefits provided by a public agency for whom volunteers perform services, and other nominal stipends.  See 29 C.F.R. §§ 553.106(b)-(e).  The regulations further provide that whether a stipend or fee will qualify as “nominal” will be determined only by “examining the total amount of payments made (expenses, benefits, fees) in the context of the economic realities of the particular situation.”  29 C.F.R. § 553.106(f).

As demonstrated above, both federal and state law permits the utilization of unpaid internships by government agencies and non-profit charities in many circumstances.  (Employers should note, however, that directing an employee to perform volunteer work that is not truly voluntary must be compensated.) The USDOL has taken the position that if the employer is directing an employee to volunteer, that time is subject to the FLSA minimum wage and overtime requirements.  See 29 C.F.R. § 785.44 (“Time spent in work for public or charitable purposes at the employer’s request, or under his direction or control, or while the employee is required to be on the premises, is working time. However, time spent voluntarily in such activities outside of the employee’s normal working hours is not hours worked.”).

Minnesota Intern Law Initial Legal Consultation

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© 2013 Trepanier MacGillis Battina P.A.

The Minneapolis internship and employment attorneys of Trepanier MacGillis Battina P.A. in Minneapolis, Minnesota represent employers regarding unpaid internship law, wage and hour law, overtime, unpaid wages, and unpaid commissions. Our Minneapolis internship and employment attorneys represent clients in Minneapolis, St. Paul, St. Cloud, Rochester, Duluth, Albert Lea, Apple Valley, Brainerd, Eagan, Eden Prairie, Edina, Elk River, Mankato, Maple Grove, Minnetonka, Moorhead, Richfield, Stillwater, Twin Cities, and other cities within the State of Minnesota (MN) (Minn.).