LARP and Employment – is my LARP legal? Fan Submission

I haven’t posted in a while. Not for lack of drama, but for an absolute deluge of drama. In such a target rich environment, one does not post lightly. What if I accidentally choose the WRONG drama, and offend the WRONG audience? Who I offend and why is very important. There is honor amongst the salty.

But below is an intriguing fan submission. I have received maybe 7 fan submissions, and they’ve largely been terrible for one reason or another (sorry guys), but this one has a lot of sourcing, humor and relevance. It’s also a behemoth: took me forever to read, and research. Once done though, I was extremely grateful to have received it. It’s very, very interesting. And they even included funny images of their own!

Fair warning, this person claims to not be a lawyer. Therefore, in the spirit of being a spiteful, lowlife prick, I will name them “TheLARPlawyer.” You know. Because I’m “The LARP Cynic.” So there’s a theme.

Get it?

I have long advocated for more LARPs, competition, and a general expansion of our hobby as a market. Customers with more choices will endure fewer abuses, and LARPs that have to compete are more likely to correct issues that drive off customers. Labor issues, if they haven’t already, will take center stage in our world. If this submission is correct, volunteers paid in goblin points won’t exist for much longer. Worth noting, I’m pretty sure this covers US law, and doesn’t speak to anywhere else.

This is a good time to stop and state, firmly, that I am not a lawyer, I don’t know if this person is actually a lawyer, and this blog post is not meant to function as legal advice or to substitute for actual legal advice. 

Without further grandstanding, enjoy some imported salt from “TheLARPlawyer:”


 

LARP and Employment Law: Is my LARP legal?

Modern LARPS are often hybrid creatures, uneasy at being categorized.  They are professional, but hobbies.  Many are businesses, but also viewed as communities.  They are at times for-profit ventures, but also rely on volunteer labor. They- Wait, what was that last one again?  

I’ll admit it, in the back of my head I’ve always wondered “wait, how does this work. Like, legally?” when I’ve seen for-profit LARPS that run on volunteer staff.  

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Since no one else has, to my knowledge, reviewed and presented the applicable laws and what might or might not be allowed under them, I’m going to follow the old adage and write the article I’d like to read.

In short, this article endeavors to answer the questions: are all of these people working for free? Are they ALLOWED to?

Spoilers:  Yes.  And if you’re a big game/collection of games, probably not.

The law that we’re dealing with is the Fair Labor Standards Act. It’s the federal law that establishes minimum wage (and that states also use for their minimum wages).  I’ll be calling it the FLSA throughout this piece.  (link to reference guide, rather than law: https://www.dol.gov/whd/regs/compliance/hrg.htm#6 ).

 

1. My “qualifications”

Who am I, to make this analysis, you may ask ?  Well, for the sake of this post, I’m a random anon on the internet.  I’m claiming no special knowledge or insight; this isn’t a formal analysis or journal article.  I will try to include some citations so that the layperson can look for themself, but there is no claim to authority here.  Take it, leave it, dissect it, call me an ignorant savage, whatever.

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Conversely, probably best not to comment with “well, *I’M* a lawyer, and you’re wrong.”  If you disagree, say so and back it up.  But for all you know, I’m a lawyer. Or an IRS agent. Or a congressional aide who wrote the law.  So let’s avoid arguments from authority.

My anonymous status ALSO means that this article is not to be taken as legal advice, a formal opinion, establishing any attorney-client relationship, etc.  If you wish for that, consult an attorney with whom you will establish an attorney-client relationship.  Regardless, it’s always best not to cite anonymous internet musings as legal authority.  

With that bit of throat clearing out of the way, let’s get started, shall we?

 

2. Who are we talking about?

For those who are “players” rather than “staff,” and whose services are solely or primarily playing NPCs, or otherwise interacting with PCs,  I think we’re all in the clear and need no further discussion.  Whether this is required or optional in your LARP, this can quite easily be characterized as a legitimate part of the experience for which the player is paying.  It might be thought of as a community duty, or a chore, but it is a part of the LARP experience.  They pay and get to play the PCs and the opposition.  It’s weird compared to other businesses, but if I were a tax examiner I’d pretty much skip it.

This does not, however, seem so readily apparent for clerical “staff” members.  Look, we’re already calling them “staff.” That doesn’t lend itself to “they’re paying for the privilege; it’s all part of the game.”  These people are, in fact, doing real work.  They are providing a service to the game that cannot be characterized as “playing” the game.  They are running the game.  These are the individuals who will make up the rest of the post.

(I’m omitting things like site managers, outside contractors/writers, etc.  I don’t think those are unique issues of LARP employment law, at least not in the context of this article).

 

“But they’re volunteers!”

Let’s start by dispensing with the first, most intuitive, and most obviously indefensible theory: people who work for LARPS are volunteers and not employees (or contractors).

“They’re volunteers who do it out of love for the game!”

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Yeah, no.  For-profit concerns cannot have “volunteers.”  Full stop.

If you feel like digging through the FLSA yourself, you’ll find that volunteers even for NON-profits are not generally exempt at ALL (with a few exceptions: government entities, food banks, and “non-profit educational conference centers”).  

Now, you can volunteer at a non-profit, have no fear.  The justification is a rather complex interpretation that boils down to “well, you’re not REALLY a business, or at least those charitable activities aren’t in business, so you aren’t covered by the FLSA at all” (https://www.dol.gov/whd/regs/compliance/whdfs14a.pdf).  That justification isn’t going to be applicable to a FOR-profit institution, though.  Because you ARE a business.  

Seriously, if you try to argue that someone is a volunteer of a for-profit company, I’m impressed at your courage, but good luck throwing away all of that money on an attorney willing to say that in court just to be laughed at.

 

“Okay, but they’re still not “Employees”… maybe independent contractors?”

The other gambit to try to ignore all of this is “well, they’re not an employee; they’re an independent contractor (whose contract calls for them to work for free).”  I don’t want to turn this into an examination of the law of employee vs independent contractor, as it’s based on common law factors so isn’t succinct.  The short version is that you don’t get to pick one on a whim, and that a true independent contractor isn’t subject to the direction and control of the employer.  

If you’re performing clerical or other logistical work under the direct supervision of other staff members… look, you’re just not an independent contractor.  The IRS started cracking down on this in the 80’s, and hasn’t stopped since.  If enough people make this argument, maybe I’ll write another post, but let us move on for now and just for the sake of argument assume that you can’t hand-wave it away by reciting “independent contractors.”

 

3. Are you paying them?

In-Game Payments

Most of these “volunteers” on staff are compensated in some way.  Extra in-game loot, or experience points, or waiver of fees to play.  Is THAT payment? Well, no.  Which I guess is good, because you don’t intend it to be payment.

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De minimis fringe benefits are specifically exempted as being considered income, which includes “no additional-cost services.” (Code of Federal Regulations 1.132-2).   These are services that are also offered to the public, but which are provided to employees without incurring substantial additional cost.  

The “payment” given to staff members or other “volunteers” falls pretty clearly under this aegis.  In-game resources (be they loot or powers or prestige) cost the LARP nothing monetarily, and allowing one extra person to play in the LARP doesn’t incur substantial additional costs.  So these people really and truly are not being paid.

 

“Well, be that as it may I don’t think I’m covered by that FLSA anyhow, so phooey to you!”

By now, you might have read excerpts from the FLSA or the guidance, and noticed that not all employers are “covered.”  Maybe you’re too tiny.  Maybe you run your LARP only in one state, and so don’t think you engage in interstate commerce.  

Is your whole LARP covered?

If your LARP is for-profit, you’re engaged in commerce.  But maybe you don’t have a $500,000 volume of business, and so you aren’t covered.  Huzzah!  Except…

We’re asking if the “enterprise” has over $500K in sales volume.  And enterprise is defined in the FSLA as:

the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose, and includes all such activities whether performed in one or more establishments or by one or more corporate or other organizational units

Now, I suppose you can argue that a network of games that coordinates rules, characters, etc. isn’t in “unified operation” or “common control,” but I personally think you’d be wrong, and the Department of Labor probably agrees with me ( here are some examples from their Field Operations Guide: https://www.dol.gov/whd/FOH/FOH_Ch12.pdf ).  So, at that point, the question is if your entire collection of related games has an annual sales volume of at least $500K.  If it does (and I have to believe at least some LARPs are that big) then you’re subject to the FLSA.

 

“Ha! I’m too small to be covered!”

But maybe you’re an independent game with a small player base and don’t make $500K annually.  Well, individuals working for you can still be covered by FLSA, but they would have to be regularly engaged in interstate commerce (which is pretty broadly defined).  This includes communicating across state lines or keep records of interstate transfers, including credit card payments.  The takeaway?  If you ARE small enough to be exempt, probably best not to have one of the “volunteers” take payment or run credit cards, or answer the phones.

Get-Out-Of-Jail-Free-Card

This limits the number of LARPs I’m now addressing.  Goodbye, smaller games, you’re free to stop reading.  If you ever get bigger, you might remember that you were gloating about SOMETHING a while back. But don’t worry, it surely will never ironically come back to haunt you once you gain more market share.

But if your game (or collection of interrelated games) has gross receipts of at least $500K, you need to be aware that you might be violating the FLSA minimum wage laws.  Because as we’ve covered, those people “volunteering” for you are probably employees.  And you haven’t been paying them minimum wage (or anything).  But worry not, for there ARE some exceptions that you might just fall under… okay, one exception.  

 

4. Exemptions

Seasonal Amusement or Recreational Establishments (is that you?  Let’s hope)

LARPS might not have had the political power to get ourselves an exemption under the law, but luckily other groups did.  And one of those exemptions seems right up our alley: 213(a)(3).

Section 213(a)(3) of the FLSA is your friend.  I’m going to post most of it verbatim.  It states that the requirements of the FLSA do NOT apply to:

any employee employed by an establishment which is an amusement or recreational establishment, organized camp, or religious or non-profit educational conference center, if

(A) it does not operate for more than seven months in any calendar year, or

(B) during the preceding calendar year, its average receipts for any six months of such year were not more than 33 1/3 per centum of its average receipts for the other six months of such year.

As to whether a LARP is an “amusement or recreational establishment” (or even maybe “organized camp”), I would say that common sense suggests it is.  And in this case, common sense seems to prevail, as this requirement has been interpreted fairly broadly within the remit of common meaning (It’s been found to include concession stands at amusement parks and beaches, lifeguards, sightseeing cruises, and all manner of wilderness camping activities).  I can’t imagine a ruling that LARP isn’t considered such an establishment.  Buuuuuuuuut…

 

Year-Round Business

…this doesn’t help if you run year-round, because you need to meet either (A) or (B).   I suppose if at least 2/3 of your receipts are in six particular months, you’re good even if you operate year round, but LARP isn’t really designed for an “off-season” like that.  If you operate only seven months a year, though, you’re golden (unless your state has additional laws.  Look them up yourself; I’m not doing this fifty times over).

Please note that this exception is provided to “establishments,” NOT “enterprises.”  So we are no longer talking about games at multiple locations all being treated as one.   Establishment is defined as“‘a distinct physical place of business’ rather than ‘an entire business or enterprise.” (29 C.F.R. § 779.23).  

If your LARP has many different locations, but each one only runs games seven months a year (even if overall it’s year-round), congratulations, this exception is for you!

 

5. Conclusion

What does this mean, internet rando who says they’re not a lawyer but whom I’m beginning to suspect might be a lawyer given all of these law citations?

If you’re a for-profit business, those people on your staff are not volunteers.  

The “compensation” they receive isn’t income (but you knew THAT part already)

If your LARP (or network of interconnected LARPs) has annual receipts of more than $500K, and if your individual LARP site runs for more than seven months a year (or the six months, 2/3 receipts)…

I’m pretty sure you are legally obligated to pay your staff minimum wage.  

I get that this sucks.  LARP is fundamentally unlike most other business models, and it would be great if there was an exception just for us.  But at the point where you’re running it as a for-profit business, there are extra laws you have to follow in addition to the sweet, sweet profit that you get to earn (not to mention that at a certain point it’s a bit unseemly to earn a profit on the back of unpaid labor).  

I told you this isn’t legal advice, and it’s not (if I’ve raised some issues you haven’t addressed in your business, though you might want to talk to a lawyer).  But if I were running a LARP or was part of a group of LARPs big enough to reach the $500K revenue mark, I would probably only operate seven months a year. Or, hell, have two locations (establishments) and operate each one for six months out of the year.

What I wouldn’t do is ignore laws if they are inconvenient.  I’m not saying that anyone has done that so far, but unless you can figure out how I’m wrong, the LARP community has to experience this growing pain from being successful.


 

For more foreign salt, could-be-legal sounding discussion, and gut-clenching fear about the number of laws our hobby might routinely break, share this content on social media, and follow me on Twitter @the_larp_cynic.

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LARP and Employment – is my LARP legal? Fan Submission

3 thoughts on “LARP and Employment – is my LARP legal? Fan Submission

  1. Anne says:

    Interesting and intelligent post! Just to clarify, if a local LARP runs for 9 months out of the year, and makes less than $500k/year, but is part of a franchise that has multiple sites under the “brand,” is it still illegal to have volunteer staff?

    Like

  2. Drive-by Opinion says:

    Nor my area of expertise, but the link to the guidance under “enterprises” SPECIFICALLY has the example of franchises as counting.

    So it sure looks like the Dept. of Labor thinks it would be covered if the franchise as a whole makes 500,000 dollars. Which… shit, that’s a lot of groups, I’d think.

    Like

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