Local Government Law Bulletin December 10, 2013

Certain Volunteers May Be Employees Under the Fair Labor Standards Act and Family Medical Leave Act

In the case of Mendel v. City of Gibraltar, the United States Court of Appeals for the Sixth Circuit issued an important opinion regarding the employment status of “volunteers” at public employers.

The plaintiff was discharged by the City and he sued for alleged violation of his rights under the Family Medical Leave Act (“FMLA”). The City moved for summary judgment, claiming that the plaintiff was not an “eligible employee” under the FMLA because the City did not employ 50 or more persons. The City’s count of employees excluded its “volunteer” firefighters, which typically numbered between 25 and 30. The plaintiff argued that the City’s “volunteer” firefighters should be included in the count to determine whether he was an “eligible employee” under the FMLA. The Sixth Circuit agreed with the plaintiff.

As is common in Michigan, the City’s “volunteer” firefighters were not paid to become certified as firefighters. Nor were they obligated to work set shifts at the fire station or to respond to any emergency calls. When they did respond, they were paid $15 per hour for their service, rather than being paid a modest amount on a “per call” basis.

In deciding the City’s firefighters were “employees” rather than “volunteers,” the Court examined the volunteer exemption in the Fair Labor Standards Act (“FLSA”), which excludes from the definition of “employee” those who perform services for a public agency for a “nominal fee.” Under the federal regulations, those who “work in contemplation of compensation” are “employees” under the FLSA, whether or not they view themselves as “volunteers.” The Court concluded that the hourly rate paid to the City’s firefighters was too high to be considered a “nominal fee.” Consequently, the Sixth Circuit held that the City’s firefighters must be counted as “employees” for the purposes of the FLSA and FMLA.

In light of Mendel v. City of Gibraltar, public employers who believe they have fewer than 50 employees should give careful consideration to the manner in which they pay their “volunteers,” as the ruling in this case could have implications under the FMLA and other laws (including the Affordable Care Act). If you have any questions concerning whether your “volunteers” are now considered “employees,” or any of the other employment or employee benefits implications of this decision, please contact one of the attorneys in our municipal practice group.

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