The US Department of Labor (DOL) recently issued Administrator signed Opinion Letter FLSA2008-15. Although Opinion Letters only apply to the exact set of facts and circumstances presented in each case, they are a valuable aid in understanding current interpretations of the Fair Labor Standards Act (FLSA).

This Opinion Letter reviews a plan by a fire protection district to provide monthly stipends to its volunteers. Apparently, the plan provides for the following stipends for volunteers who perform twenty-four or more hours of service per month:

Volunteers cannot receive compensation, but may receive a combination of “expenses, reasonable benefits, or a nominal fee.” Generally, the DOL finds that a fee is nominal “as long as it does not exceed 20% of the amount that otherwise would be required to hire a permanent employee for the same services.” Since the district did not provide the DOL with market data to perform the 20% test, the DOL was unable to make the determination whether or not the fee was nominal. The district itself could make that determination, however, upon gathering the appropriate economic data.

State laws may provide rules that are more beneficial to the employee and must be followed. Contact Vision Payroll if you have questions about this Opinion Letter.