Nonprofits enjoy greater freedoms in employment laws compared to their profit counterparts. Particular forms of all nonprofits can engage in religious discrimination. Nonprofits have more freedom in using volunteers and unpaid interns, even enabling workers to volunteer in certain conditions.
The Fair Labor Standards Act requires that some specific workers be paid overtime for hours worked over 40 hours a week. The FLSA covers firms that work in interstate trade or produce goods for commerce. Nonprofit workers, however, are exempt from the overtime condition, except in very particular conditions, such as when a nonprofit offers a JV with a commercial enterprise.
Unpaid internships are inspected closely by the US authorities, as using unpaid interns as workers rather than paying violates the FLSA. The U.S. Department of Labor even offers a six stage guide for determining when an outstanding intern is in fact a worker that must be paid. This six stage test, however, applies only to for profit businesses. Normally, the labour department allows unpaid interns with non profit businesses if the job is for humanitarian, charitable or many reasons.
Normally, the FLSA does not allow workers to work additional time with a for profit company without reimbursement. Since workers of nonprofits can be very enthused about the nonprofit's cause, the worker may want to volunteer to assist in a nonprofit's event or function, like a secretary that works for an animal rescue and volunteers in an adoption event.
The most crucial distinction is the worker doesn't feel coerced to volunteer. Further, the employee shouldn't be doing the same type of job that he'd do in his job. Generally, nonprofits are subject to the same discrimination laws as for profit businesses, including private businesses. Equal Employment Opportunity Commission, any private Company with 15 or more workers cannot discriminate based on race, gender, color, disability, religion or genetic information. Any private Company with 20 or more workers cannot discriminate based on age.
Nevertheless, an exception to the religious discrimination rule exists for nonprofits using a religious focus, like a church. To determine if a non-profit qualifies, courts look at 9 factors, including if the organization holds out to the public that it is religious focused, whether it's supported or managed with every religious organization and whether it engages in frequent worship, prayer or religious instruction. A few states have stricter legislation than the EEOC regarding whether a non-profit religious organization can discriminate based on faith beliefs.