Is volunteer work always unpaid? Learn your employer obligations

Over 5 million Australians volunteered their time through an organisation or group in 2020, and with this number increasing year on year, it’s important businesses understand the rights of volunteers – and how underpaying them can happen.

While some unpaid work arrangements are lawful, many are not. Only recently was a Sydney childcare centre penalised $30,240 for failing to pay two of their volunteer workers for an entire year. Generally, unpaid work is unlawful except for a few limited exceptions outlined below. Employees have the right to be compensated for all work they perform for their employer.

In this article, we unpack what volunteering is, how it’s defined in the eyes of the law, what legislation covers this type of work, and why businesses must be on top of every employees’ rights, volunteer or not.

How do vocational placements work?

Under the Fair Work Act 2009 (Cth) (FW Act), certain individuals are excluded from employment entitlements, including persons on a vocational placement. Vocational placements are formal, regulated arrangements undertaken as a requirement of an education or training course and authorised by law. As a result, not every period of work experience will qualify as a vocational placement. Vocational training programs provide students with essential skills to ease their transition from study to the workforce while offering businesses the chance to enhance student learning experiences and boost the number of work-ready graduates.

That makes sense. But what about unpaid trials or skill demonstrations?

A job candidate may also be asked to perform an unpaid trial for testing or demonstrating their skills if necessary to evaluate their suitability for the role they’re applying for, for example, a barista candidate making a cappuccino. A brief unpaid trial can be legally unpaid if it’s necessary to evaluate someone’s suitability for the role, and it involves no more than a demonstration of the person’s skills, it’s only for as long as needed to demonstrate the skills required for the role, and the person is under direct supervision for the entire trial.

Any period beyond what’s reasonably required to demonstrate the skills required for the role must be paid at the appropriate minimum rate of pay. If an employer wants to further assess a candidate’s suitability, they should employ the person as a casual employee or for a probationary period and pay them accordingly for all hours worked.

What about unpaid work experience and unpaid internships?

Unpaid work experience and internships may be undertaken where the person isn’t performing substantive or productive work for the business. This may involve, for example, shadowing a professional while they perform their role. The main benefit of the arrangement should be to the person doing the placement, and it must be clear that the person is receiving a meaningful learning experience, training, or skill development. These arrangements can be a valuable way for prospective employees to transition from study to work, or explore a new career path. Sometimes these arrangements span several months and can lead to ongoing employment.

What are the requirements for volunteering?

The final exception in which a person may perform unpaid work is when a person volunteers to help the beneficiaries of a cause or organisation, such as a charity or a religious group. Volunteers aren’t employees and don’t have to be paid. It’s important, for a genuine volunteering relationship to be found, that the person doesn’t have an employment relationship with the business: including that the person isn’t required or obliged to help, that they’ve no expectation of being paid, and that the arrangements are relatively informal. The more structured and formalised volunteer work arrangements become, such as expecting volunteers to adhere to a regular roster, the greater the possibility that an employment relationship will be found. An employment relationship is less likely to be found when volunteer work is performed for selfless purposes or for furthering a particular belief in the not-for-profit sector.

The Sydney childcare centre referred to above failed to back-pay two migrant employees who worked for the centre under the guise of a volunteer arrangement. Both employees were originally from China. One was a permanent resident of Australia, while the other was a visa holder. Fair Work Inspectors investigated after the employees asked for assistance and found that the volunteer arrangement wasn’t legitimate because they had performed productive work under little supervision that wasn’t a formal part of their tertiary studies. The Compliance Notices required the centre to back pay two childcare employees, who had been paid nothing despite being entitled to a total of $54,752 in wages and entitlements for work they performed between February 2016 and February 2017.

What are the next steps for businesses?

Employers should be conscious of the laws around unpaid work whenever they consider engaging an individual without intending to pay them. Merely labelling an arrangement as a work experience placement or volunteering isn’t sufficient to make it so under the law and getting it wrong can prove disastrous.

How can Citation HR help?

As you can see, intentionally underpaying your employees doesn’t just cost your business financially, it can severely damage your reputation, and soon under new laws, individuals can face jail time and huge penalties. While most business owners wouldn’t dream of intentionally committing wage theft of volunteers, mistakes can and do happen – this is where we can help you. Citation HR can complete a thorough HR compliance audit of your business – and the best part – this service is included in our monthly, cost-effective subscription which is designed to protect your business from costly risks. If you’d like to explore how Citation HR can safeguard your business, contact our team here.

About our author

Kurt Calma is a Workplace Relations Adviser at Citation HR. He regularly provides advice on workplace matters via the 24/7 HR advice line to find solutions for clients.