Not everyone who works in your business is necessarily your employee.
Some directors/owners choose to work in the business without getting a salary or fee.
Sometimes you hire contractors to perform work for you.
And in some cases, you’ll have a person volunteer their time to work for you. They may want to do so to get work experience, or to help your non-profit cause.
By and large, directors, contractors, and volunteers are not employees.
But just because you call someone a director, contractor, or volunteer, that is not the end of the matter. The law looks at the real nature of your relationship with these people.
If they meet certain tests, they will in fact be your employee, regardless of what you thought they were.
In the case of volunteers, such as unpaid interns, you need to be particularly careful. A well-intended petrol voucher may be the tipping point.
EMPLOYEE v VOLUNTEER
Employees expect, and receive, payment from you.
They don’t turn up to work for the mere fun of it. They have a bargain with you and expect you to keep it. They work, you pay.
By contrast, true volunteers do not have such an expectation of payment from you. They just want to help or learn.
Trouble arises when someone you thought was a volunteer:
- expects payment for serving you; or
- gets paid something for their work, even if it’s not what you would normally pay your staff.
When either of the above occurs, those “volunteers” may in reality be your employees. And like all employees, they will need to be paid the minimum wage, PAYE, and holiday pay.
You may have unwittingly taken on a new staff member.
IT DOESN’T HAVE TO BE WAGES
“But I’m just giving them the odd petrol voucher!” you might say. That’s hardly treating them like an employee, who would expect an hourly wage or salary, is it?
It doesn’t matter what you “pay” the person. If it ends up giving them a benefit in return for the work they do for you, then that may mean they are your employee.
Accommodation, petrol vouchers, even salads, can all be relevant “payments”. They may not be wages, but they can turn what you thought was a volunteer into your employee.
CAN YOU PAY A VOLUNTEER AT ALL?
Even so, you might still want to pay a volunteer something.
It may be a token gesture to thank them for their service. Or to ensure you cover any costs they incur by helping you.
Don’t fret – it is possible to pay volunteers to reimburse some of their costs. And a token payment to a volunteer to thank them for their efforts (an honorarium) can also be permissible.
But you must be very clear about what that payment is for. It must not relate in any way to the work they perform.
For example, a large honorarium might start to look like a payment of wages or salary. And expenses payments that far exceed reasonable expenses could also look like wages.
As with any work-related relationship, it’s good practice to write out your intentions. Draft a written agreement covering what expenses you intend to pay for and how you will pay these. Be clear that the person is a volunteer, free to attend work or not. And get them to sign the agreement before they start attending your place of work.
It’s great to be able to give someone some experience in your workplace or to get help with your cause.
Yet taking on volunteers bears similar risks to pre-employment work trials. In both cases, you must be clear that the person cannot expect to receive payment for their work.
Nor should you pay a volunteer, unless you agree (in writing) to cover their costs or pay them a small honorarium.
Clarifying their legal status at the outset should mean you avoid unintended employment.
Has anyone volunteered for you lately? Would you say they expected a payment from you for their work?