Employment Laws in Work Programs

I am often asked about what needs to be done in order to comply with state and federal laws when recovery programs clients do actual work in the facility. In all cases, I suggest that an employment attorney or tax professional familiar with the laws in your state be consulted in these matters. However, here are a few suggestions that can be taken to help you comply with laws regarding the payment of the minimum wage for recovery program participants.

A. The work must be therapeutic – Too often, the lines have been blurred between mission employees and clients (beneficiaries). The most effective means of clarifying these lines is having a well-documented recovery program in place that uses a written recovery plan that lists the work performed by the client as being rehabilitative in nature. There is no problem in giving some stipend to program participants who perform work as part of their recovery program. If this is done, it is important to avoid the use of the terms “staff” and “wages” or any other terminology that could imply an employee/employer relationship. Instead, call this stipend a “sustenance allowance” or “gift.” In the initial intake session, clients should sign an agreement indicating that they understand that some hours of work will be a part of their recovery program, but that this is a part of their rehabilitation and not establishing an employee/employer relationship for which they will receive wages.

B. Stipend amounts and level of participation in program activities must be equal for all clients – It is acceptable to offer differing amounts for stipends during different phases of the program as a form of incentive. But, it is critical that all clients in the same phase receive the same amount – regardless of actual hours worked. Also, regardless of what “job” a client has been assigned, he must not be exempt from participating in the same activities required of others at the same level or phase of the recovery program. Tying compensation to hours worked or exempting certain individuals from fully participating in the program’s recovery-oriented activities may give the appearance of establishing an employee/employer relationship.

C. “Key” positions are best filled by employees – It is very tempting to “missionize” talented people by keeping them “in the program” indefinitely. A better arrangement is to fill important positions (cooks, drivers, etc.) with individuals in a latter phase of a program who become actual temporary employees of the mission. These individuals will naturally be more stable and dependable. Not only will this arrangement reward those who are doing well in their recovery, it also assists them to begin re-establishing an employment record. In some states, minimum wage requirements might be met by combining cash payments with the established “fair market” value of the housing and meals that are provided. The program may then only responsible for the FICA withholding and matching payments, since non-cash compensation is usually not subject to state and federal employment taxes. Consult a professional for details about laws in your state.

Adapted from an article that originally appeared AGRM‘s Rescue Magazine