[fiblye]

The internet has had paid and free communities and forums forever. I can’t think of a single one where voluntary non-employee moderators got paid. Tech support forums for ten billion dollar companies also sometimes have non-employee moderators who I’m pretty sure are not paid.

[notadev]

AOL used Community Leaders to moderate chats and forums. The CLs filed a complaint with the Department of Labor for violations of the Fair Labor Standards Act (FLSA) and eventually sued, winning a $15 million settlement.

It's a violation of the FLSA to use volunteers to do unpaid work at a for-profit company, even if the volunteers are OK with not getting paid. It's only going to take one mod to file a DoL complaint before Reddit scraps all the mods or centralizes the mod duties under actual employees.

https://en.m.wikipedia.org/wiki/AOL_Community_Leader_Program

https://webapps.dol.gov/elaws/whd/flsa/docs/volunteers.asp