Good Morning (or Afternoon, you know, whatever time it may happen to be when I get this post up. I’m a busy man.) and welcome back to the triumphant return of Furry Friday here on Lawyers & Liquor, brought to you by FurPlanet! Want a bit of furry reading to do? Need a comic that you haven’t seen on the shelves in years? Just want to convince them that investing in sponsored posts on my site wasn’t a horrible use of their time and money? Drop to all fours and dart over to Furplanet to peruse their collections of literature!
Cool, we got the contractually obligated shit out of the way? Great. Let’s start talking then! This is the one day of the month where I hand the reins to this site over to the badger that lives inside me so that we can go over some legal issue that directly arises from, touches on, or otherwise affects the furry fandom in some way. So let’s swing those kennel doors open wide, unplug your connection to FurryMUCK, and steal Kage’s wine as we talk about the legal trials and pitfalls that face for-profit convention operators in the furry world. Specifically, why they probably should use volunteers only with an abundance of caution and after running the idea by legal staff.
Because while some unfortunate furries may be getting “voluntold,” if a for-profit con does it too much or for too long there’s a very real chance it could get volun-sued.
I’m the Boozy Badger, and I’m about to get banned from a lot of events here on Furry Friday.
DISCLAIMER TIME! – Much worse than Adventure Time.
We’ve covered this shit a lot on here, but I really need you guys to remember that I’m a lawyer in the United States. That means when I talk about questions of law, it’s going to be based on law as it exists in the United States. I also need you to remember that although we’re going to be talking about federal law today, the interpretation of federal statutes that have not been before the Supreme Court of the United States are very much open to differing interpretations depending on where your case is heard. Finally, and for fuck’s sake this is important, this is an educational and hopefully entertaining discussion regarding law and copyright. It isn’t in any way, shape, or form legal advice for your specific situation. If you want me to represent you and form that magical attorney-client relationship, which will be much more disappointing than your first relationship in high school ever was, you gotta come into my office, meet with me, sign an engagement letter, and pay my ass. I’m not your lawyer. You need to go contact a lawyer in your jurisdiction regarding any legal matters and not take advice from a guy who can’t go three sentences without saying “fuck” most of the time.
What is a for-profit convention, Boozy?
I’m glad you asked, Oliver the Obvious Owl Strawman! In the grand scheme of the marketplace of furry ideas and events, the convention is the end goal for many people. A multiple day gathering where members of the furry fandom come together for a raucous good time amongst others with an interest in the anthropomorphic arts and laugh, sing, play, dance, and generally hang out with their friends. At the same time, they tend to raise a shit-ton of money for charitable purposes while doing so, and it’s all in all a rollicking good time…and I’m not just saying that because I flit back and forth performing at these things these days. They’re genuinely a fun way to cut loose.
Many of these conventions are organized as non-profit corporations under the laws of their respective states and under federal law, having gained 501(c) status from the IRS by following certain guidelines not only in their creation, but also in their operation. For instance, a non-profit really cannot operate “for profit.” On creation of a non-profit, it must designate a charitable (in the case of a 501(c)(3)) or social (in the case of a 501(c)(7)) purpose, and every penny that is made after the payment of expenses must then be dedicated to the furthering of that purpose in some way. So, for instance, a 501(c)(7) non-profit social club couldn’t take membership dues and invest in Microsoft or something to increase its money, because that wouldn’t provide an arguable benefit to the members of the club (which is the overriding non-profit purpose of such social clubs). Likewise, a 501(c)(3) couldn’t take money received from its operations and start a record label for exactly the same reason – that’s a for-profit enterprise and the usage of the funds likely has little to no connection with furthering the charitable purpose.
And, as I’ve said before, there are a shit ton of these charitable purposes. We call them NTEE Activity Codes, short for National Taxonomy of Exempt Entities Codes, and these are the things that tell the IRS exactly what the fuck your non-profit should be doing with all of its money. And, once you’ve chosen one for your organization, that’s really fucking it. All the money that the organization expends must go towards that charitable purpose and the furthering of the same. There are no exceptions – except, you know, ones that are like “oh yeah, a non-profit can still have employees and should pay them” because that does, in practice, further the goal of the non-profit.
However, some of these organizations, for whatever fucking reason, aren’t formed as non-profits and instead form as a for-profit entity. Which means the rules regarding the expenditure of cash aren’t present – for-profit entities can make and spend money however they damn well choose, because they are (at least in theory) being taxed on that shit. So a for-profit could reinvest money received, make money from it, or bring in shareholders or owners for sudden influxes of cash to better the event. That sort of shit. But we’re not going to talk about that today, because there is one glaring liability that a for-profit entity running a convention almost always seems to overlook. One major detail they never really address.
…They almost all use goddamn volunteers.
Volunteering is good, Boozy.
Yeah, it is. The furry (and other) fandoms damn near run on volunteers, especially when it comes to a lot of the events that are managed by those conventions.
Quick history lesson: many furry organizations and conventions are non-profits, and according to the Department of Labor a non-profit is allowed to take on volunteers to perform just about any task. Volunteers do not have to be compensated for the things like working the door to the Dealer’s Den at the strictly scheduled time of noon to 2 p.m., checking the badges of everyone who walks through them. Likewise, volunteers in those capacities, though they could (like an outside contractor hired for security purposes) be paid, do not typically expect to be paid, although they may gain some sort of compensation in the form of a discounted registration, a t-shirt, or something else along those lines.
So, as for-profit conventions began forming it wasn’t out of the ordinary that those conventions would seek to use the same volunteer model. Give people a little something extra for volunteering and your small, for-profit furry convention could begin to grow as well! But while for-profit conventions have been typical and widespread in fandoms outside of furry for a good long while now (we’re looking at you, basically every “Comic Con” except for the one out there in San Diego), they’re relatively new to the furry fandom and have left some questions in the many varied muzzles of folks who attend. Among those questions? “How can they use volunteers?”
…Conventions Always Use Volunteers, Dude.
Look, Olly Strawnman, er, owl, we’re not looking at what conventions do, but rather what they should, or in this case shouldn’t be doing.
Alright, to understand how this shit matters you have to take a moment and actually understand that, by and large, we’re not too fucking keen in the United States on people doing work for a company without getting paid. We did that for a long fucking time and, uh, I mean, you know, saying it wasn’t the best system is a bit of a goddamn understatement. Even after the end of literal slavery, companies kept trying to find neat little ways to bend the working person over and screw them harder than hell out of every bit of pay they could. So, we instituted something in 1938 called the “Fair Labor Standards Act” at the behest of then Senator and, shortly thereafter, long-term Supreme Court Justice Hugo Black. Black’s bill would set minimum working standards that all employers in the United States were expected to adhere to so long as they worked in “interstate commerce” (which, as any first year law student will tell you, is a pretty goddamn big net to cast that touches on just about every business in existence today). Among the things it guaranteed were a minimum wage, overtime pay, and a limit on the number of hours a person could be forced to work in a week – as well as a firm statement that an employer must pay their employees for work performed.
If Black hadn’t had worrying connections to the KKK and been in favor of throwing Japanese Americans in camps during International Shooting Scuffle the Second, we could say this he was a pretty solid guy. But, you know, it wouldn’t be American History if we didn’t toss in a hefty dose of racism.
Anyhow, the FLSA, as we hip motherfuckers in the know call it, has been amended and shaped over the years by Congress and judicial interpretation, but we’ve never bothered to do a complete overhaul of the thing on the basis that it specifically states the regulations which define its enforcement are set by the Department of Labor, and therefore they can be changed to some extent without going through the whole “vote in a new bill” sort of deal. Which is why you have to really look to 29 C.F.R. 500, et seq., the Federal regulations regarding the enforcement powers of the Department of Labor’s Wage and Hour Division, to determine the meaning of the and application of the FLSA to current times and employers and, you know, just trust me, you really don’t want to spend a lot of time digging around in Federal Regulations. It just isn’t worth it a lot of the damn time.
But here’s the first takeaway: Most for-profit organizations that purport to use people as “volunteers” are going to be in some form of violation of the Fair Labor Standards Act.
Explain yourself, Badger!
Okay, so, the way administrative regulations work is, even if there isn’t a regulation directly on point, there is most likely some form of informal guidance from the Department of Labor as to the application of the regulations and how they would likely address a situation. This is particularly important because, in many of these situations, the determination of whether or not an action is in violation of a certain act is going to left up to the agency itself to define.
And define it the Department of Labor has in its own informal policy statement on the Department of Labor’s website, which, can I take just take a second and say how fucking awesome it is that we live in an era where we’ve moved away from dusty old informal opinion letters on paper in a bound reporter somewhere and to shit being on a government site labeled “elaws?” Truly this is the golden age of lawyer dickery. Anyhow, the FLSA, as informally interpreted by the Department of Labor on its site, specifically states that “[u]nder the FLSA, employees may not volunteer services to for-profit private sector employers[.]” By the way, the bolding on “for-profit” is in the original text of that opinion, which, you know, means it’s really goddamn important.
To put it in layman’s terms, this is the Department of Labor, the agency responsible for making determinations as to the application of the Fair Labor Standards Act and pursuing violations of the same, basically saying “Hey, if you do this we’re probably going to kick you in the balls. Like, we’re not 100% sure we’ll kick you in the balls, but it’s really fucking likely. As in, we’re putting on those awesome boots we bought with the really pointy tips. So don’t fuck around with us, okay?”
So we can, from the informal guidance, say that it is the opinion of the Department of Labor (informally) that volunteers at non-profit agencies are in the pink, whereas a for-profit agency taking on a volunteer is just not fucking okay at all, Jesus fuck we made a law about this shit, what are you doing?
So everyone’s breaking the law then?
Okay, informal opinions are threats. They’re letting you know the current mode of thought of the organization, and there’s nothing in the FLSA that explicitly bans a person from volunteering at a for-profit or a for-profit benefiting from that labor. However, sometimes in law we have to look at what isn’t in a law, like the definition under 29 C.F.R. 553.101 which states a “volunteer” is:
29 C.F.R. 553.101
An individual who performs hours of service for a public agency for civic, charitable, or humanitarian reasons, without promise, expectation or receipt of compensation for services rendered, is considered to be a volunteer during such hours. Individuals performing hours of service for such a public agency will be considered volunteers for the time so spent and not subject to sections 6, 7, and 11 of the FLSA when such hours of service are performed in accord with sections 3(e)(4) (A) and (B) of the FLSA and the guidelines in this subpart.
You notice that in the definition of “volunteer” we don’t see a single mention of “for-profit” companies or events, which to a layman may make it seem like those are good to go. However, the fact it’s not there is telling, as the rest of the definition is pretty goddamn comprehensive in showing that it is only in these circumstances that the Department of Labor would be willing to consider someone to be a volunteer – when the work is done:
- For a public agency or civic, charitable, or humanitarian reason; and
- Without expectation of compensation
In all other cases, according to the wage requirements of the FLSA, an employer (in this case meaning a private, for-profit entity) cannot “suffer or permit” any person to perform work that could be performed by an actual, paid employee without compensation. 29 U.S.C. 203(g); 29 U.S.C. 206 (requirement of a minimum wage for all employees).
And, while there may not be a hard and fast law against volunteering at a non-profit company, the fact is if they’re deemed to be employees by a court, you’re gonna find yourself fucked harder than a raccoon needing to shred a little cheddar.
What if they ASK to be volunteers though, huh?
Doesn’t fucking matter. The law hates the concept of unpaid labor for for-profit companies, and will ignore whatever title you use to decide they are either 1) unpaid employees and therefore entitled to receive compensation in line with the minimum wage standards or 2) independent contractors who are performing work at an agreed upon rate/level of compensation. There is no inbetween here, none whatsoever.
And I can already hear people saying “Cool, we’ll call them independent contractors and comp their badge. That’s compensation and we’re all good then.”
Interesting thought. Also, you’re wrong in thinking it, jackass.
“Employee” is not a term that you get to define. The courts, especially in the area of labor regulations, have already designed a number of tests to determine whether or not someone is an employee, and frankly it doesn’t matter what label you apply to them. You can call someone the Otter King of the Headless Lounge if you damn well please, but that won’t prevent a court from determining they’re really an employee.
Over the years, we’ve developed a sort of catch-all legal test for determining whether or not someone is an employee or an independent contractor, regardless of what title is applied to them. It’s a factoring test, which means no one factor itself is dispositive but rather you add weight to each of them and then make the determination under the totality of the circumstances present in that specific situation. This factoring test is described by the courts, and by the Department of Labor itself, as considering:
- The extent to which the services rendered are an integral part of the principal’s business.
- The permanency of the relationship.
- The amount of the alleged contractor’s investment in facilities and equipment.
- The nature and degree of control by the principal.
- The alleged contractor’s opportunities for profit and loss.
- The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
- The degree of independent business organization and operation
And I can tell you, there have been court cases regarding specifically how this is treated in making the determination, with especially heavy weight being given to the nature of the work (i.e. would it be typical work that an employer in the same line of business would expect a paid employee to do) and the level of control (i.e. are there posted schedules that someone must adhere to; is the employer directing the nominal volunteer how to perform their duties). Typically, if those two are met, you’re going to see the determination of an employee relationship.
And if there’s an employee relationship with a for-profit entity, which is in the line of work or benefits the for-profit business itself, the courts that have addressed the matter are fairly clear: the compensation must be equal to or exceed the minimum wage for the number of hours actually worked.
Okay, so we gave this…volunteer…a badge worth $50 and he volunteered for 5 hours, so that’s the same as $10 per hour and over the minimum wage.
Not so fucking fast, because you’re forgetting some other shit there. Primarily, you’re forgetting that the goddamn government wants its blood money, motherfucker.
Employers, unlike 1099 contractor situations, are responsible for not only paying wages but also for withholding amounts for tax payment pursuant to federal and state law. That means that even if you provide a “volunteer” at a for-profit event some form of compensation in the way of admission, swag, etc., the entity is still liable for the taxes. And if the entity doesn’t pay them, well, then the government is coming after the nominal volunteer for that blood money.
Remember, there is always a government component to an employee relationship.
Okay, but its’ good practice to give stuff to people that help you, right?
Sure. I mean, it keeps them happy.
Also, it’s gonna almost certainly make them employees instead of “volunteers” because, you know, an expectation of receiving compensation for work that could be performed by an actual, paid employee is actually a part of that test I told you earlier. In at least one case, the receipt of “extra shopping time” for volunteering at a company’s consignment sale was enough to have volunteers ruled to be employees when they worked the cash register, kept time cards, and had scheduled shifts and their participation was integral to the company’s business model of irregular, large event sales. Those facts, coupled with an expectation of compensation of any sort, was enough to shove them from “volunteer” into “employee” and open the organization up to civil penalties, unpaid wages, and tax liability under law.
Any of that sound familiar to a furry con volunteer?
So, why does this really matter, though?
Well, it doesn’t. Until it does.
See, conventions and, indeed, numerous online for-profit companies, have operated with the help of volunteer labor for a long fucking time. And, for just as long, we’ve known that this is a huge goddamn issue. Back in 1999, America Online (you know, that service Grandpa calls “The Internet”) was sued by its community moderators for consideration as employees entitled to overtime compensation and minimum wage…and AOL settled it.
Additionally, Emerald City Comic Con, Phoenix Comic Con, and fucking Wizards of the Coast have all faced possible lawsuits (most of them settled) from their use of volunteer labor at events, each with the exact same allegations: we’re not volunteers, we’re employees, and we deserve to be paid for our time. And the fact that you have to entice us to do this shit by giving us stuff? Well, that means we all knew that we expected to receive something in return.
Would now be a good time to mention the Emerald City Comic Con case settled with the convention paying half a million dollars in unpaid wages to its “volunteers”?
Naturally, though, these happen the most when you’ve really pissed off your base.
Not that anyone would start drama in this fandom over cons and compensation…right?
Are there solutions?
Make people pay to volunteer.
That’s the solution Phoenix Comic Con came up with, and it’s pretty solid. They contracted with a 501(c)(7) that they…may have just completely created….for all of the volunteer services. And people would then pay to join that 501(c)(7) social club – like $20.00 or so – and be allowed to volunteer as part of the team for the convention…receiving, as a part of the convention’s contract with the social club, a membership (priced higher than the $20.00) and all the normal stuff they get…but with none of the risk on the for-profit entity. Because they are, indeed, contracting with another organization that is allowed to have people truly volunteer under law.
Isn’t it neat how that shit works out?
By the way, if you think this concept is completely out there, maybe consider the Dorsai.
Because this is, pretty near, exactly what the fucking Dorsai are.
There’s a lot to unpack on this topic, and we’ll re-visit it again at some point in the future, but for now this post has gone on WAY too long. And that means it’s time to wrap it up with a couple final thoughts:
- It’s important to consult with your attorney before doing things, as a lawyer will clear up any points of doubt;
- For-profit conventions aren’t necessarily good or bad, but in this day and age it’s important to be aware of the particular differences between them and non-profit ones – especially when it comes to labor restrictions;
- Giving things to volunteers in these settings is a double-edged sword;
- Don’t piss off either the Department of Labor, the state and federal taxing authorities, or a former “volunteer” that may sue you;
- I’m never getting invited to parties ever again.
Till next time, go visit our sponsor FurPlanet, and remember: no room parties after the end of quiet hours, you filthy animals.
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