In an age where company culture and corporate social responsibility take center stage, organizations are continuously seeking ways to leave a positive impact not only on their employees but also on the community at large. Enter volunteer time off (or VTO for short) – an initiative where employees are granted paid time off to give back to their communities through volunteer work.
While this concept might sound unconventional to some or get chalked up as just another costly perk, in reality, it is a burgeoning trend among forward-thinking companies. Like corporate charity, volunteer time off provides mutual benefits for businesses, employees and communities that are undeniable.
In this blog, we'll take a look at the importance of corporate charity and then we'll delve into the intricacies of volunteer time off. By the time you finish reading this article, you'll understand why paying employees for community service isn’t just a noble gesture, but a strategic move for businesses in a modern era.
Corporate charity is a huge resource to the community that runs into the billions and it's on the rise, according to Giving USA's 2022 annual report. In fact, from 2020 to 2022, it increased by 23.8% and rose to a total of $21.08 billion.
While recipients benefit greatly from charitable giving, companies that support charitable causes and their employees reap the rewards as well. In fact, research shows that companies that participate in charitable giving and support their employees' desire to give back through volunteer time off have more engaged employees and improved company culture.
Charities.org lists many more benefits to companies that engage in corporate charity, including increased employee retention and recruitment, improved growth strategy, increased employee productivity, reduced turnover and increased revenue.
Now that you understand the importance of your employees being on board with giving back, let's look at how employees should (or shouldn't be) compensated for their time spent volunteering or participating in community service.
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In general, under federal law, if employees engage in company-sponsored volunteer activities during work hours or time they would ordinarily be working, they must be paid for that time.
Outside of regular work hours, volunteer time is compensable if:
Employers are not required to pay non-exempt employees for volunteer time spent outside their normal work hours for truly voluntary activities not controlled or directed by the employer. Requests to perform charitable event tasks like hosting an event or providing promotional activities can cross over to compensable requirements.
Even though you might not have to, consider paying employees to volunteer to strengthen your company’s commitment to your community, like imageOne did, to the benefit of their employees, the company and the communities in which they do business.
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Answer: Not if non-exempt employees voluntarily enter the race outside of company time.
However, if your company asks a non-exempt employee to coordinate asking employees to form a team, register the team in the race and provide public relations information to local news outlets about the efforts, that employee’s work in coordinating the volunteer activities is compensable.
Answer: It depends. If the request is only an invitation to participate on a completely voluntary basis for activities outside of regular work hours, then no, the volunteer time does not have to be paid.
But if the request is made to individuals directly, and is tied to performance evaluations and compensation, then it becomes directed by the employer and is compensable volunteer time off.
Answer: If it’s a non-exempt employee, yes. A properly classified exempt employee, no.
Just because a company is not legally required to pay for employees to participate in volunteer activities doesn’t mean they can’t. As we mentioned earlier in this post, many organizations are offering volunteer time off, which is paid time for employees to spend on the charitable activity of their choice.
Let's take a deeper look at volunteer time off and what should be included in your volunteer time off policy.
What is volunteer time off? Volunteer time off, commonly abbreviated as VTO, refers to a company policy that allows employees to take paid time off from their usual work duties to volunteer in the community. VTO varies from company to company, but the core idea remains consistent: employers support and encourage their staff to engage in community service or charity work during work hours without a loss in pay.
In a 2023 LinkedIn survey, 82% of US employees expressed a desire to work for companies with aligned values and culture. And while having a volunteer time off policy provides immense benefits to your employees, including boosting their mental health, teaching them new skills and providing them with a sense of purpose, it also benefits your company.
Here are four key benefits:
VTO empowers employees to support causes close to their hearts, such as combating domestic violence or climate change. This enhances your business's image as a community-conscious entity.
Organizing group volunteer events can unite employees, especially remote workers, fostering connections beyond the workplace. It eases the process for employees, letting them focus on volunteering.
Benevity's 2022 study highlighted a 52% reduced turnover in new employees engaged in corporate purpose activities. Having a vacation time off policy can be a minimal yet impactful investment, simplifying the hiring process for HR.
SHRM's 2023 survey revealed only 28% of employers offer paid volunteer time off. Being in this minority can set your company apart, attracting top-tier candidates.
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What to Include in Your Volunteer Time Off Policy
A volunteer time off policy is essential for businesses that wish to formalize and streamline the process of offering paid volunteer opportunities to their employees. Having a defined volunteer time off policy in place provides clarity, structure and guidance to both employees and management.
Here's what a volunteer time off policy might include:
Outlines the reasons for offering VTO and identifies the target beneficiaries – whether it's local communities, global initiatives or specific causes such as education or health.
Specifies which employees are eligible for VTO – is it open to all staff or just full-timers? Are there any probationary periods?
Details on how much VTO is available to employees. This could be a set number of hours or days annually. Some companies might offer a lump sum annually, while others might provide a certain number of hours or days per month or quarter.
A step-by-step guide for employees to request VTO, detailing the approval process, any necessary documentation and the manner in which the time off is recorded.
While some companies might allow employees to volunteer for causes of their choice, others may have a list of approved charitable organizations or causes. This section may also clarify if there are any activities that won't be covered.
Clarification on how employees will be compensated during their VTO. Most often, employees are paid their regular wages, but the specifics will depend on company policy.
Some companies might require employees to provide proof of their volunteering, such as a letter from the charitable organization. There might also be a feedback mechanism in place for employees to share their experiences and encourage others in the organization.
While the aim is to encourage volunteering, a VTO policy might have restrictions on the maximum number of consecutive days taken, or clauses to ensure that business operations are not adversely affected.
Offering VTO is a testament to a company’s dedication to societal good, and it also serves as a valuable tool for increasing employee engagement, boosting morale and even attracting talent and improving retention.
Incorporating community service and volunteer programs into your company's culture not only fosters a sense of purpose but also strengthens your organization's relationship with the community. However, managing the logistics and legal aspects of compensating employees for their volunteer time can be challenging. That's where Axcet HR Solutions, a leading professional employer organization (PEO), can assist.
With our expert HR consulting services, we can guide you through the process of implementing a robust vacation time off program that aligns with your company's values and meets legal requirements. From designing fair compensation policies to ensuring compliance, Axcet HR Solutions has the knowledge and experience to streamline the entire process.
At Axcet, our leadership team believes in the team-building and community-supporting benefits of VTO - it's another extension of our commitment to the Kansas City community. Learn more about some of the initiatives the team at Axcet has supported over the years.
Ready to make a difference in your community while supporting your employees? Contact us today to learn how Axcet HR Solutions can help you establish a successful program that recognizes and rewards your employees' commitment to volunteerism. Together, let's create a positive impact both inside and outside the workplace.
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