If the credits are part of an express or implied agreement with the volunteers, to compensate them for their time, then the credits are wages, and the entire regime is illegal under California law. Federal law provides that a person can volunteer for free or be paid as a worker. There is no middle ground.
The workers are employees, they are entitled to at least minimum wage, to receipt of the credits in cash, at least once before the 15th of the month and then again before the 1st of the following month. The nonprofit is liable for payroll taxes, Social Security, Medicare, unemployment, workers compensation, SDI, etc.
Big trouble. Any worker can file a wage claim with the Division of Labor Standards Enforcement.
And, each worker can file a form SS-4
with the IRS.
Hope this helps.
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