© 2025 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2025 ed. | 23 important benefit, such as housing, the threat of losing that benefit might lead a court to hold that the work was not free from pressure or coercion.133 An organization may occasionally wish to pay its volunteers a stipend or offer some benefit in exchange for their services. The FLSA permits volunteers to receive compensation for their expenses, reasonable benefits, or a “nominal fee” without losing their exempt status.134 The FLSA does not define what constitutes a “nominal fee,” but regulations specify that such payments must not be substitutes for compensation or linked to productivity.135 Generally, payments that increase with the number of hours worked or the amount of work done strongly suggest that a worker is an employee and not a volunteer.136 In addition, to be considered a “nominal fee,” the sum of the payments to a volunteer should not exceed 20 percent of what a regular employee would be paid for performing the same service.137 2. Interns/Trainees a. The Federal Exemption for Interns The position of the DOL has changed as to when an intern or trainee is entitled to the minimum wage under the FLSA. From 2010 until January 2018, the DOL had followed a six-factor test set out in a 2010 Fact Sheet for determining whether an individual performing services for a forprofit entity is exempt from the federal minimum wage requirements as an intern or trainee. The six factors were: 1. The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in an educational environment. 2. The internship is for the benefit of the trainees or students. 3. The trainees or interns do not displace regular employees but work under their close supervision. 4. The employer derives no immediate advantage from the activities of the interns, and the employer’s operations may be actually impeded. 133 Genarie v. PRD Mgmt., Inc., Civ. No. 04-2082(JBS), 2006 WL 436733, *12 (D. N.J. Feb. 17, 2006) (finding a worker was not a volunteer because she performed work in exchange for lodging, and the fear of losing her housing meant she was not free from coercion or pressure). 134 29 C.F.R. § 553.106(a). While this regulation is limited to state and federal governments, common sense suggests that the rule applies more broadly. The regulation lists several factors to consider in determining whether a fee is nominal: the distance traveled; the time and effort expended by the volunteer; whether the volunteer has agreed to be available around-the-clock or only during certain specified time periods; and whether the volunteer provides services as needed or throughout the year. An individual who volunteers to provide periodic services on a year-round basis may receive a nominal monthly or annual stipend or fee without losing volunteer status. See also DOL Wage & Hour Opinion Letter FLSA2004-6 (July 14, 2004). 135 29 C.F.R. § 553.106(a); DOL Wage & Hour Opinion Letter FLSA2008-16 (Dec. 18, 2008). 136 29 C.F.R. § 553.106(a); DOL Wage & Hour Opinion Letter FLSA2008-16 (Dec. 18, 2008). 137 29 C.F.R. § 553.106(a); DOL Wage & Hour Opinion Letter FLSA2008-16 (Dec. 18, 2008).
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