When is a “full time volunteer” who is supported through in-kind wages actually an employee so that the sponsor has to pay social security taxes?

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When is a “full time volunteer” who is supported through in-kind wages actually an employee so that the sponsor has to pay social security taxes?

If an organization calls people “full time volunteers” rather than employees and they live only on the in-kind services received through the organization, does the organization have to file with Social Security and will these persons ever be eligible for SS benefits if they stay with the organization? If this is legal, why don’t more employers do this–many, like grocery stores and restaurants, could save a lot of money by paying in leftover food and letting their “volunteers” sleep in the back room. Jobs are scarce; “volunteers” are there. Is this abusive?

Asked on June 11, 2012 under Employment Labor Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If "full time volunteers" for an organization do not get wages but rather "payment" in kind for volunteering such as room and board, the organization does not have to submit a W-2 for such a person and as a result such a person who is a "volunteer" does not pay income tax nor receive social security benefits.

Such a situation is not abusive IF the "volunteers" agree to the "stipend" in kind for services they render for the organization.


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