Volunteer or Employee? Why the Distinction Matters

Could that person legally be considered an employee?

The distinction matters because the label you use does not necessarily determine the legal relationship.

Why the volunteer question deserves attention

Many nonprofits operate with a mix of paid employees, volunteers, contractors, board members, and students. As organizations grow, these roles can overlap.

A volunteer might initially help at occasional events but gradually become responsible for managing a program every week. A nonprofit might offer an honorarium or provide another form of payment in recognition of the work.

These arrangements can develop without anyone deliberately intending to create an employment relationship.

The risk is assuming that calling someone a volunteer automatically removes employment obligations.

What determines whether someone is an employee?

The answer depends on the applicable law and the actual circumstances of the relationship. Relevant factors can include the nature of the work, the degree of direction and control, the arrangement between the parties, and whether the person receives remuneration.

For Alberta employers, the Employment Standards Code and related rules are important considerations. Other legislation may also apply depending on the organization and the circumstances.

The Canada Revenue Agency separately examines the facts of a working relationship when determining employment status for tax purposes. Its assessment may consider the parties' intentions alongside the actual

It is important to note that tax classification and employment standards classification are related but distinct questions. The CRA's guidance on employee versus self-employed status does not, by itself, settle whether someone is a volunteer under employment standards legislation.

Warning signs that a volunteer arrangement needs review

Consider seeking HR or legal advice if a volunteer:

• Works a fixed schedule and is expected to attend every shift.

• Performs ongoing work essential to the organization's daily operations.

• Receives regular payments that may be compensation rather than reimbursement.

• Is managed much like paid staff, with performance expectations and disciplinary consequences.

• Has gradually assumed responsibilities that would ordinarily belong to a paid position.

None of these factors alone automatically establishes employment status. Together, however, they may signal the need for a closer assessment.

How can nonprofits reduce the risk?

1. Define the role clearly. A volunteer role description should explain the purpose, duties, expected commitment, supervision, and boundaries of the position.

2. Distinguish reimbursement from compensation. Reimbursing reasonable, documented expenses is different from paying someone for their work. The substance of the arrangement matters, not just the terminology.

3. Review arrangements as roles evolve. A position that began as occasional volunteer support may change significantly over time. Review it when duties, hours, supervision, or payments change.

4. Maintain appropriate records. Document the volunteer arrangement, relevant policies, training, confidentiality expectations, and safeguarding requirements.

5. Get advice before problems arise. If the relationship resembles employment, assess the facts before continuing to rely on a volunteer designation.

Protecting volunteers also protects the mission

Volunteers should be valued and supported, and paid employees should be treated fairly. Clear role definitions help organizations maintain trust, plan resources responsibly, and avoid preventable disputes.

The goal is not to discourage volunteering. It is to make sure the arrangement reflects what is actually happening.

Is your nonprofit unsure whether a role should be volunteer or paid?

Neoterik HR & Coaching Solutions supports nonprofits with role design, HR policy development, employment documentation, and practical guidance on people-management risks.

Connect with Neoterik HR & Coaching Solutions to ensure your people practices support your mission and your obligations.