Is a volunteer entitled to the National Minimum Wage?

Is a volunteer entitled to the National Minimum Wage?

Opportunities for volunteering are commonplace and where properly structured do not give rise to the complications that arise from engaging employees or other paid workers.

However, for those organisations that are less prepared, the risk remains that, even without intending to provide financial reward, a contractual arrangement is brought into existence and a national minimum wage (NMW) entitlement is created.

Indeed, as the concept of ‘reward’ is more widely interpreted for these purposes, it is all too easy to inadvertently fall into this trap.

Examples where employers have fallen inadvertently into the NMW volunteer trap include:

  • The payment of “round sum” expenses without expenses claims or other evidence of actual cost incurred.
  • The provision of items of uniform/clothing as a fringe benefit for volunteer helpers.  
  • A charity’s proposal to thank volunteers for their time in acting as a committee member by way of a voucher.

In all of the above cases, each became a ‘worker’ for NMW purposes and, therefore, under the regulations, the employer was required to pay these workers for every second worked.

Are there any exceptions to the rule?

There may be grounds for exemption, for example:

  • Where a volunteer receives a genuine one-off gift: depending on the circumstances of the gift, the individual may not be a worker for NMW purposes. 
  • Where the engagement pattern meets the specific exemption for “voluntary workers” but, as the examples above demonstrate, careful consideration is required for any payments you make to volunteers unless it relates to out-of-pocket expenses (even here, conditions apply).
  • Where its part of a work experience programme (see below).

Is an intern entitled to NMW?

Whilst the legislation defines a “volunteer”, we aren’t so lucky when considering interns. The term “intern” is not specifically defined in NMW legislation and can mean many different things to an employer.

It is therefore necessary to consider the exact engagement pattern and consider if they are:

  1. A volunteer, or
  2. An individual undertaking work experience as part of a further/higher education course (conditions apply), or
  3. An individual undertaking work experience as part of a government programme/return to work scheme (conditions apply), or
  4. Other.

The first category, as already mentioned is not straight forward. The second and third category is less complicated, but employers need to be able to evidence they and the individual meet the exemption criteria.

The fourth category is deliberately named based on our experience of how HMRC typically look at the concept of an intern. In these cases, unless you can demonstrate that the individual is literally work shadowing another individual (and by literally I mean no photocopying, no admin or any form of work related task), then they might be outside the scope of NMW. Otherwise HMRC will expect them to be paid for every second and challenge the organisation if they are not.

Protecting your organisation

The overriding message is that for any organisation which engages volunteers, an awareness of both what they are provided with as a consequence of their role and how it might be construed for NMW purposes is key. An independent review and risk assessment can help in identifying not only inherent problems but also appropriate steps that can be taken to avoid future problems.

If you have any questions regarding your NMW position and require assistance, please do not hesitate to get in touch with John Weston  or your local expert: