The development has sparked concern among voluntary organisations, which would be obliged to report non-attenders to local authorities.
Ed Balls, Secretary of State for Children, Schools and Families, confirmed last week that the Education and Skills Bill would propose that 16 to 18 year-olds would have to take one of three options, including volunteering, or face a fine.
The options are: full-time education at school or college; work-based learning, such as an apprenticeship; or one day a week of part-time education in conjunction with employment, self-employment or volunteering for more than 20 hours a week.
"If young people fail to take up these opportunities, there will be a system of enforcement - very much a last resort - but necessary to strike the right balance between new rights and new responsibilities," Balls told a Fabian Society meeting. "No one will be left out on the basis that it's just not for them - or it's too hard to meet their needs."
A spokeswoman for the Department for Children, Schools and Families confirmed that young people would have to take up one of the options or face a fine, and that volunteering organisations would have to report non-attenders.
A spokeswoman for volunteering charity v said the move would be counter-productive. "We are concerned that stringent compulsory measures could negatively alter the relationship between the organisation and participants," she said.
Rob Jackson, director of volunteering, development and grant making at Volunteering England, said the proposals needed some clarification.
However, he added that his organisation would be concerned if the Government were talking about enforced volunteering.
Other charities said the problem was one of semantics. John Ramsey, head of volunteering at Age Concern England, said: "The problem is terminology. If you replaced the word 'volunteering' with 'community service', then that would be fine. But if you force someone to volunteer, it's not volunteering."
Dame Elisabeth Hoodless, executive director of volunteering charity CSV, echoed Ramsey's view: "Any future legislation would need to address the distinction between volunteer service that is willingly undertaken and can be completed at will, and community service that is the fruitful engagement of those who may face consequences if they fail to show up."