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If you receive valuable compensation in exchange for labor, are you volunteering or are you employed?
If an agency, a concessionaire, or a non-profit organization operating upon federally managed public lands gives a free recreation pass in exchange for a specific quantity of labor performed, is that showing appreciation or providing employment?
The Oregon Court of Appeals will soon be taking up those issues in a nationally significant case. The case involves the giving of seasonal ski-passes to those who  volunteer for the Bend-based Mt. Bachelor Ski Education Foundation --- but, so I suggest, something FAR more important is at stake!!
The Federal Lands Recreation Enhancement Act of 2004 authorized the creation of a the America the Beautiful Volunteer pass which, according to government sources "will be issued free of charge to volunteers who accrue 500 volunteer hours." The America the Beautiful Pass is the contentious new $80 public lands recreation pass which replaced the older National Parks Pass and now provides basic access to most federally managed public lands.
According to the front page article from today's Bend Bulletin (appended), with respect to the giving of ski passes, Oregon's "Employment Department and Department of Justice are arguing that those free annual passes are actually the equivalent of wages, because they have value and were offered in exchange for service."
The Hearings officer said:
"Volunteering is commendable and in many ways governmental policies and laws do encourage this ... but the volunteer work cannot be done in exchange for remuneration or with the expectation of remuneration being paid."
I've long said that the America the Beautiful Volunteer Pass was ILLEGAL because it compensates workers at the equivalent of sixteen cents per hour and runs afoul of minimum wage laws. Now it appears that the awarding of an America the Beautiful Volunteer Pass may have more legal problems than those to which I've previously pointed. And as the federal government continues to transition from using paid employees
to using volunteers, the issue of what exactly is a volunteer will become of
increasing importance.
Scott
---- begin quoted ----
(Optically Scanned, ORC errors possible)
Bend Bulletin, Page A1
May 15, 2007
Volunteers could lose ski passes
By James Sinks The Bulletin
SALEM - If you volunteer on the slopes, you might soon need to kiss
that free ski pass goodbye. Or, at the very least, you might not get
one unless the state of Oregon gets a little money out of the deal.
That's the upshot of a case that's headed to the Oregon Court of
Appeals, which could threaten the ability of charities to reward
volunteers for donating their service.
The unhappy beneficiary of the attention is the Bend-based Mt. Bachelor
Ski Education Foundation, a not-for-profit organization that teaches
kids to ski and hosts races at Central Oregon's popular skiing resort.
Each year, to get roughly 30 volunteers for at least 22 races - and to
ensure those volunteers can actually get to their assigned positions on
the slopes -the nonprofit provides each of them with an annual pass to
Mt. Bachelor.
But to justify an unemployment claim by a volunteer from the 2005
season, the state's Employment Department and Department of Justice are
arguing that those free annual passes are actually the equivalent of
wages, because they have value and were offered in exchange for service.
"These volunteers were given a full-season ski pass, which is quite
substantial," said Craig Spivey, a spokesman for the employment agency.
"It wasn't just a one-day pass or a T-shirt or something like that."
By extension, that means those volunteers are actually employees -and
so the foundation will need to pony up unemployment insurance and
potentially all of the other expenses that come with having paid
workers, such as payroll taxes and workers' compensation insurance.
That leaves a lump in the throat of Chuck Kenlen, the foundation's
director. He says the foundation - which is giving bargain-rate annual
passes that have been donated by Mt. Bachelor - is in no position to
put 30 more people on the payroll.
If it loses the case, he says the foundation will be forced to audit
its books and pay the state as though its volunteers were all employs,
just because they got passes.
"Just about any nonprofit that has volunteers that help will give them
something like a plate at a fundraising dinner," he said, "but what the
state is now saying is that if somebody else could buy it, then it's
compensation."
The state won the argument in front of a hearings officer. The foundation appealed, but the state won that round, too.
So now, the matter heads to the Court of Appeals for a July 10 oral
argument. Written arguments have already been submitted by both sides.
In those, the state argues that the foundation's volunteers were
actually workers because they got something of value. "The pass was
payment for services rendered," the state writes.
The state says the value of the passes is $915. The Foundation argues
they were worth $415, even though the charity gets them for free.
The state also notes that the foundation could cancel the passes if the
volunteers did not show up for shifts -which means the passes weren't
really gifts but payment contingent on the work.
The case could send ripples across the state: It is being followed by other ski clubs, Kenlen said.
Mt. Bachelor, which supplies annual passes to its ski patrol
volunteers, "at this point" still intends to do the same next winter,
said spokeswoman Janette Sherman.
Employment Department spokesman Spivey said the foundation would not be
facing a case if the volunteers hadn't received something with extra
value - such as if the foundation had provided single-day passes on
only race days.
"Certainly the idea is not to keep nonprofits from recognizing
volunteers and thanking them' he said 'But the fact the volunteers get
a season pass to Mt Bachelor that is where we had to look a little
deeper into the relationship."
Ironically, it would cost the charity much more to supply single day
passes. This year, single day tickets were $52 and holiday daily
tickets were $58.
That pencils out to more than $1,100 per skier - rather than a season pass the foundation gets for free and sells for $415.
"It's mind-boggling," Kenlen said. "Every dollar we spend on that is a dollar less we can spend on programs."
The foundation is the beneficiary of the annual Pole Pedal Paddle race
from Mt. Bachelor to Bend, and has more' than 550 children and 100
adults in ski and off-season training programs.
Tax collection.
The case also has piqued the interest of the Oregon Department of Revenue.
The tax-collection agency has not focused on the value of compensation
offered by charities to volunteers for their service, but that could
change as a result of the case, said Gary Humphrey, a department
manager.
We will need to vet it pretty thoroughly, but anytime we have a unique
situation that comes up, it could have other impacts that bring it to
our attention," he said.
The agency is responsible for enforcing tax laws, and if a court rules
that charities are paying wages to so-called volunteers rather than
offering something of little value, then it could trigger income tax
withholding, he said.
"We will be interested in seeing how this turns out."
State Rep. Chuck Burley, R-Bend, said he also will be tracking the case
- and says legislation will be in order if the court rules against the
foundation. But that would have to wait until the 2009 session.
While supplying annual passes could cross a threshold into which
unemployment compensation is required, it would likely not trigger the
need to pay wages, said Christie Hammond, administrator of the wage and
hour division of the Bureau of Labor and Industries.
We have never received a wage claim or a complaint from volunteers," she said.
"Different state agencies have different tests to determine whether there is an employment relationship."
The original case was triggered when a volunteer, Judy Lear, claimed
the volunteer pass as compensation in 2005 when she tried to obtain
unemployment benefits. The state ruled that Lear was an employee and
the foundation owed an additional $32.78 in employment taxes for 2004.
In that decision favoring Lear, the hearings officer wrote: "(The
foundation) argued that by considering the pass remuneration, and so
subject to taxation, it would have a chilling effect on people
volunteering for charitable institutions."
"Volunteering is commendable and in many ways governmental policies and
laws do encourage this ... but the volunteer work cannot be done in
exchange for remuneration or with the expectation of remuneration being
paid."
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