Arizona Court of Appeals Division One Holds That a Worker’s Compensation Claimant Is a Volunteer Rather than an Employee, and Thus Is Not Eligible for Benefits, if the Claimant Does Not Receive Payment as Remuneration and Instead Only Receives Reimbursements and a Stipend to Facilitate the Claimant’s Volunteer Work.

Sheila Henderson-Jones worked in Africa as a teacher under a program operated by the International Foundation for Education and Self-Help (“IFESH”), a 501(c)(3) non-profit.  Before travelling to Africa, IFESH told her that she was participating as a volunteer and provided her handbook confirming her volunteer status.  She also signed an agreement stating that she was a volunteer, was not an IFESH employee, and would receive a monthly stipend and certain reimbursements (most of which was non-taxable), but not a salary.  While in Africa, she was injured in a bus accident.  She returned to the United States and filed a workers’ compensation claim, which the Industrial Commission denied.  She timely requested a hearing, but the ALJ entered an award for a noncompensable claim, explaining that she was a volunteer rather than an employee. The ALJ then denied her request for administrative review, and she timely appealed.         

The Arizona Appeals Court affirmed. To be eligible for benefits under Arizona’s Workers’ Compensation Act, a worker must have been “in the service of an employer subject to [Act]” at the time of the injury.”  See A.R.S. §§ 23-901(6)(b), -902(A), -12021(A).  To establish an employer-employee relationship, there must be a contract of hire.  A.R.S. § 23-902(A).  To establish a contract of hire a claimant must establish, among other things, that he or she expected to receive, and did receive, payment for services rendered.  As the Court explained, the right to payment is the critical inquiry when a claimant claims he or she is an employee rather than a volunteer.  The totality of the facts must be considered, including the intentions and expectations of the parties regarding payment.  Applying these principles, the Court held that Henderson-Jones was a volunteer because she did not receive payment as remuneration for her work, and instead only received reimbursements for her incidental, out-of-pocket costs of volunteering.

The Court rejected Henderson-Jones’s claim that her monthly stipend was a wage because it exceeded her living expenses.  The Court explained that most of the stipend was not taxable and was not “bargained consideration.”  The Court further explained that the Worker’s Compensation statutes do allow for awards for certain categories of volunteers, but that she did not fall under such a category.

Judge Gemmill authored the opinion; Judges Norris and Brown concurred.