Key aspects to bear in mind when offering volunteering and work experience

1-7 June is volunteering week.  Many employers assume volunteers and those on work experience have no rights at all but that is not always the case.  Here we look specifically at the entitlement to National Minimum Wage ('NMW') for those supporting the work of charities and social enterprises.

Charities and social enterprises form a crucial bridge helping people into work by providing volunteering and work experience opportunities. Many organisations will specifically provide these opportunities to their own beneficiaries.

Offering such opportunities can have unintended NMW implications.

When does NMW apply?

Entitlement to NMW depends on the contractual relationship the individual has with the organisation, not their job title. It doesn't matter if the individuals are described as being 'on work experience', 'volunteering', 'in work placements' or 'on an internship'. If the arrangement makes the individual a worker (or employee) in law, then they are entitled to NMW unless a specific exemption applies. This will apply to beneficiaries working for a charity which is supporting them as much as to those volunteering to support other charitable purposes.

The key is whether the individual meets the definition of 'worker' for the National Minimum Wage Act 1998 ('NMWA'98'). Under the NMWA'98, a worker is an individual who works under a contract to personally do or perform work or services for another, provided this person is not a client or customer of the individual.

Under a contract to perform work or services personally

A contract can be oral or in writing or a combination of both and is little more than an agreement by the individual to perform some kind of work or services in return for some kind of benefit. That benefit does not have to be significant and the absence of any payment is not critical.

However it is key that there is some kind of obligation on the part of the individual, including actually turning up. This is a difficult area for many charities using volunteers where, if only for cover purposes, the charity may look for some degree of certainty that the volunteer will turn up when expected.  This 'certainty' can provide the basis of the obligation to work required to establish a contractual relationship with the individual sufficiently enough to satisfy the NMW definition of a worker. In some cases this could even go so far as to satisfy the wider definition of an employee.

We will look at employment status in a separate article, but it is sufficient here to urge caution when using volunteer agreements and role descriptions.

In the context of volunteering and work experience there is a clear expectation of 'personal service'; it is simply not credible that the individual could provide a 'substitute' to do the work in their place.  The service provided will be dependent on the particular role.

Opportunities such as 'shadowing' would not ordinarily involve the provision of work or services and hence will not create the worker relationship to which the NMW applies.  Work experience is more likely to combine such 'watch and learn' opportunities with the performance of some usually minor tasks. An intern will often take on yet further responsibilities.

In most scenarios, a volunteer (whether that is on 'work experience', 'work placement' or an 'internship') can be a worker for NMW purposes, if only for that time when they are actually working.

NMW exemptions

If the NMW definition of worker is met then there are exemptions which mean that the individual will still not qualify for NMW. These include:

  • Students working as part of a UK-based further or higher education course where the work placement forms part of the course and the placement with any single organisation does not exceed one year;
  • Children of compulsory school age;
  • Participants in government schemes providing training, work experience or temporary work or help in seeking or obtaining work; and
  • Volunteers, provided that (i) the employer is a charity, voluntary organisation, associated fund-raising body or statutory body, and (ii) they are not paid any monetary payments and receive limited and specified expenses and benefits.

'Charity volunteers' are therefore specifically catered for in the exemptions.  This exemption can apply to social enterprises depending on their voluntary status, but care is needed and it certainly is not automatic. However, outside of those on government schemes or in full time education, those on work experience or internships will be entitled to NMW. 

Volunteers can be paid reasonable out-of-pocket expenses, but again care is needed. For example, if a charity makes a standard payment to all its volunteers as a convenience to cover the cost of travel or subsistence, but a particular recipient doesn't incur such costs, then that payment will mean the exemption does not apply and entitlement to the NMW will be triggered.

Where a charity's beneficiaries volunteer or undertake work experience with the charity there is no special protection for the charity or exemption from NMW.  The test above remains the same.

Wrigleys comment

Most individuals will derive some kind of benefit from work experience, even where that falls short of developing skills and know-how. This is where the terms 'work experience' and 'volunteer' can easily blur.

All charities, and some social enterprises, can make ready use of volunteers either to support their activities or as a primary charitable purpose to support employment opportunities.

Provided the decision to perform the work or services remains voluntary and no financial incentive, benefit in kind or promise of future benefit is given, the volunteer will not be entitled to NMW. Providing limited benefits to cover actual expenses will enable charities to support those in financial need with access to volunteering opportunities without engaging NMW.  However, charities can run the risk of beneficiaries in receipt of other financial support alongside their volunteering being caught under NMW entitlement.  

A volunteer agreement can help to avoid the creation of a worker relationship provided its terms are aspirational rather than obligational, setting out what it is hoped the volunteer can do to help the organisation without any pay or benefit in return.

Smaller charities in particular can find difficulty where they are dependent on volunteer support to undertake key tasks.  It is here that the line between worker and employee status may be crossed, bringing more than just NMW implications.  Worker status will also bring with it rights to paid holiday, protection from discrimination and the right not to be treated less favourably for working part-time.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.