In the United States, there are laws that cover this. On the federal level, it is the Fair Labor Standards Act. Since there are many non-profit and for-profit status hostels here, both should be explained.
Non-profit designation by the IRS means the hostel meets public service, religious, or humanitarian objectives. HI USA is the biggest non-profit hostel organization, but not all of their affiliate hostels are "non-profit." Many churches in major cities also operate hostels under their control.
There is a line set for what constitutes volunteer work, which is that the volunteer work cannot be something that would normally be done by an employee. If the volunteer is doing work that an employee would do, then that means they are an unpaid employee and entitled to compensation.
Under the FLSA, employees may not volunteer services to for-profit private sector employers. On the other hand, individuals can volunteer services to public sector employers. Hostels would not fall under this category unless run by a local government agency like a local park service or a public-private partnership.
For-profit hostels can use interns, but an internship has very specific stipulations. The following six criteria must be applied when making this determination:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
No matter if a non-profit or for profit, an employee must be paid minimum wage. This even applies to a manager that receives a free apartment as part of the job -- they need to be paid at least $455/week salary.
There are also state laws to consider that affect both non-profit and for-profit the same. As an example, I had to have more than $30,000 paid out in back pay covering 2 years because the state considers "sleep" to be work if the employee is required to be on call or on premises less than 24 hours.