Volunteer labor for businesses can lead to consequences, litigation
While all businesses should be concerned with using accurate time and attendance software to successfully track shifts and pay, a few businesses are using volunteer labor to augment their paid staff.
An Arkansas-based consignment company that uses volunteer labor in exchange for the first pick of incoming merchandise was told by the U.S. Department of Labor that its practices were in violation of the Fair Labor Standards Act following an investigation, according to Bloomberg Businessweek. The DOL decided that the company had violated minimum wage laws but didn't rule that back pay was due to the volunteers.
The DOL ruled that the volunteers could file suit against the company for the wages. Those workers haven't initiated a lawsuit, but a lawyer for the business said other results of the ruling have had a chilling effect on the business. Media coverage of the company has decreased and there are fewer people interested in opening franchises.
Arkansas minimum wage is $6.25 per hour, although companies that do more than $500,000 in business per year and those in certain other situations must pay employees the federal minimum wage of $7.25 per hour, according to the Arkansas Department of Labor.
Correctly managing employee attendance can help businesses stay compliant with labor laws and avoid litigation.
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