Status of Parks and Recreation worker

For the city I work for, the past practice has been to pay the umpires, coaches and instructors in the Parks and Recreation area by regular warrant, not through the payroll system so no taxes are withheld, unemployment paid, etc. There is no formal contract with these individuals but all parties understand that the work is for a short duration, the City schedules the games/classes, there is no supervision given and the hours vary widely (sometimes over 40 per week).

Four questions:

1) What problems are we setting ourselves up for?
2) Can anyone point me to the correct statutes so I can do additional research?
3) If these folks were hired as employees, would the recreational establishment exemption in FLSA apply?
4) If a formal contract would help, does anyone have a simple, legally approved one they can share?


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